Facebook (Nasdaq: FB), the No. 1 social network, announced it would increase the number of shares in its initial public offering, price them higher and value the company at as much as $104 billion. REUTERS

Facebook (Nasdaq: FB), the No. 1 social network, announced Tuesday it would increase the number of shares in its initial public offering, price them higher and value the company at as much as $104 billion.

The social network giant, which already includes 14 percent of the global population as members, plans to sell an extra 50 million shares priced as high as $38 each, up from the prior range of $28 to $35. The new total is 337.4 million shares.

The Menlo Park, Calif.-based website made the announcements in filings with the U.S. Securities and Exchange Commission, confirming that demand generated by its weeklong road show last week had been a success.

Assuming all the shares are subscribed at the full price, Facebook's IPO could be the third-largest ever, beaten only by General Motors (NYSE: GM) and Visa (NYSE: V). Facebook could raise as much as $6.4 billion in the sale and as much as another $1.8 billion more if there is an over-allotment of shares, the new filing said.

Investment bankers had said demand had been huge for Facebook shares, following last week's sales trip headed by CEO Mark Zuckerberg, 28, who will control at least 57.3 percent of the outstanding shares, and other Facebook executives. Zuckerberg, who founded the company in his dormitory room at Harvard University eight years ago, plans to sell 30.2 million shares, netting him as much as $1.15 billion. After the sale, his remaining stake could be valued at as much as $18 billion.

There are 33 underwriters for the deal but the three principals will control most of the details and collect the lion's share of fees. They are Morgan Stanley (NYSE: MS), JPMorgan Chase (NYSE: JPM) and Goldman Sachs (NYSE: GS).

Facebook has reported 901 million members, although the filings say as many as 5 percent are fraudulent. The filings also say the principal reason for the IPO is to allow Zuckerberg to pay as much as $2.6 billion in capital gains taxes on his Facebook shares. As in the previous filings, Facebook's latest document merely specifies the funds are for general corporate purposes and could be invested in government securities.

Of course, funds could also be used for acquisitions, such as the $1 billion announced for the acquisition of private Instagram of San Francisco, as well as $550 million paid to Microsoft (Nasdaq: MSFT), the world's biggest software company, for patents it has recently acquired from AOL (NYSE: AOL), the No. 7 website. In the new filing, Facebook said it expects to complete the Instagram acquisition for cash and shares later this year. The new language probably reflects a routine investigation by the U.S. Federal Trade Commission into the sale.

The company has reported that for the 12 months ended March 31, net income was about $974 million on revenue of $4.04 billion. Under the new share price, the new price-earnings ratio for the shares would exceed 100 percent.

The new filing doesn't mention any settlement of the recent patent case brought against it by Yahoo (Nasdaq: YHOO), the No. 3 search engine, which alleged infringement in a case in U.S. District Court in San Jose, Calif. Some had expected Facebook would settle before the IPO, awarding Yahoo either cash or IPO shares.

That would repeat what happened when Yahoo sued Google (Nasdaq: GOOG), the No. 1 search engine, before its 2004 IPO and won $230 million in new shares.

The new pricing reflects management's best estimates and discussions between us and the underwriters, the filing said. Still, even at $38, the IPO price is slightly below reported prices on secondary exchanges such as SharesPost earlier this year, the only place insiders have been able to sell Facebook shares until recently.

Assuming Facebook's filing is the last before the deal is done, the underwriters are now most likely to deal with share allocations and the final price, which would most likely be determined after U.S. markets close on Thursday. That's when the actual IPO would occur and the company would be required to announce it.

Public investors would likely have their first crack at buying Facebook shares on Friday. Given the high demand, it's likely the first trades would be above $38.