Facebook Inc. said today it has priced its shares at $38 for its initial public offering. If investors agree with that price when Facebook shares go on sale tomorrow, the social network’s valuation would stand at $104 billion.

Facebook yesterday increased the number of shares it will offer in its initial public offering to 421.2 million from 388 million. Including the nearly 63.2 million shares earmarked for overallotment, which allows underwriters to buy additional shares to meet excess demand, Facebook could raise more than $18.4 billion.

Facebook is not selling any of the additional shares. Rather, they are being sold by the company’s founders, employees and investors. The social network begins trading on Friday on the NASDAQ exchange using the symbol FB. CEO Mark Zuckerberg is scheduled to the ring the exchange’s opening bell from Facebook’s California headquarters.

Facebook’s IPO stands to be the largest ever to come out of Silicon Valley. Google Inc. raised nearly $2 billion when it went public in 2004. “The strong pricing at $38 indicates unabated, exuberant investor demand,” says Josef Schuster, founder of IPO research and investment house IPOX Schuster. “Given the big stock market slump across all market sectors during the past weeks, which is not reflected in Facebook’s share price, investors at these levels may be in for a rough ride for the time being.”

The share pricing comes shortly after one of the largest advertisers in the United States, General Motors, said it would pull its ads from Facebook because of their poor results. Facebook generates most of its revenue from advertising. In 2009, 2010 and 2011, and the first quarters of 2011 and 2012, advertising accounted for 98%, 95%, 85%, 87%, and 82%, respectively, of Facebook’s revenue.