This is a follow-up to our previous post re the Facebook IPO.
Ok folks, so the Facebook IPO will go ahead...
...In fact, the initial filing, to get the proverbial IPO ball a rollin' started yesterday.
But the caveat is that instead of the rumored US $10 billion, the IPO will actually go for US $5 billion.
...what this means is that Facebook is hoping to raise US $5 billion dollars when its shares are first sold on the major US stock exchanges -namely NASDAQ and the New York Stock Exchange in May 2012.
So the lead underwriters - Morgan Stanley (sorry Goldman Sachs :)), did a pre-IPO filing, aka a S-1 filing yesterday, where they submitted Facebook's corporate information and financials to the US securities regulators - the Securities and Exchange Commission.
Whose main responsibilities are:
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Protecting the interests of securities investors.
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Developing and maintaining fair, transparent and efficient securities markets.
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Ensuring the proper issuance of securities and compliance with securities laws.
Now, Facebook's shares on the private markets went for US $35.50, this week, said to indicate the potential IPO price when shares are eventually offered publicly in May of this year.
(However, Facebook has reportedly stated in its IPO paperwork, that its own internal valuation puts their current value at $29.73 per share.
A pretty cautious valuation if you ask me).
The auction for these private shares ended today, according to leading technology news site, TechCrunch.
So, how this works is that as soon as a company is about to file an IPO, things slow down publicly, they aren't allowed to issue new product announcements and they have to stop trading on the private (secondary) markets.
However, the underwriters have a lot of work to do from now until May.
(JPMorgan Chase & Co., Goldman Sachs Group Inc., Bank of America Corp., Barclays Plc and Allen & Co. are the other underwriters who are helping Morgan Stanley with the IPO).
...not to worry, these guys are making tens of millions from the deal, from legal and other fees...not too bad for 5-7 months of work, eh? :)
Well, I can tell you that besides the underwriters, the other person with an even bigger grin on his face, right now, is Facebook founder and CEO, 27-year old Mark Zuckerberg and soon he'll be smiling all the way to the bank!..
(Mark Zuckerberg is pictured beside the Facebook logo in the inset picture above).
His share in Facebook is said to be worth $16 billion - from the 534 million shares he holds (at the current valuation of $29.73 per share)...but in paper money...
He only gets cash in hand when he sells a few of his shares...(of course when they burgeon up past $45 on day 1 of trading :)).
Which you can bet he will!
Will keep you posted re this and other updates re Facebook.:)
Gillian
Sources Include
1. Article,"Zuckerberg's Facebook stake is worth at least $16 billion", by David Goldman, CNNMoney.com, via Yahoo Finance, February 3,2012
2. Article, "Facebook Role May Win Morgan Stanley IPO Lead for Third Year", by Serena Saitto, Jeffrey McCracken, Carol Hymowitz and Michael Moore in New York and Brian Womack in San Francisco. Editors: Elizabeth Wollman, Jennifer Sondag Bloomberg Businessweek, February 2,2012
3. Article, "Facebook IPO: $5 Billion Filing to Sell Stock in May", ABC News Technology, by Ned Potter, ABC News: Technology,February 1,2012
4. Article, "Facebook to Celebrate 8th Birthday on Heels of IPO Announcement"by Samantha Murphy, Mashable, January 31,2012
5. Article, "Pre-IPO Filing, Facebook Trading Privately At $84 Billion Valuation", by Eric Schonfeld, TechChrunch.com, January 30,2012
6. Article, "Facebook IPO: Everything You Need to Know [VIDEO]", Zoe Fox, Mashable, January 31,2012
7. Article,"Brokerage Functions: Underwriting And Agency Roles", by Jason Van Bergen, Investopedia.com, November 6,2010
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