الرئيسية
NEW YORK (AP) — Facebook,
the social network that changed "friend" from a noun to a verb, is
expected to file as early as Wednesday to sell stock on the open market.
Its debut is likely to be the most talked-about initial public offering
since Google in 2004.
The
Menlo Park, Calif.-based company expects to raise as much as $10
billion, though some accounts say it could be less than that. At $10
billion, the company would be valued at $75 billion to $100 billion.
The
highly anticipated documents Facebook files with the Securities and
Exchange Commission will reveal how much it intends to raise from the stock market, what it plans to do with the money and details on the company's financial performance and future growth prospects.
A stock usually starts trading three to four months after the filing.
Around
the nation, regular investors and IPO watchers are anticipating some
kind of twist — perhaps a provision for the 800 million users of
Facebook, a company that promotes itself as all about personal
connections, to get in on the action.
After all, Facebook founder Mark Zuckerberg
is anything but a conformist. He turns up at business conventions in a
hoodie. "Cocky" is the word used to describe him most often, after
"billionaire." He was Time's person of the year at 26. So when he takes
Facebook public, why would he follow the Wall Street rules?
"Pandemonium
is what I expect in terms of demand for this stock," says Scott Sweet,
senior managing partner at IPO Boutique, an advisory firm. "I don't
think Wall Street would want to anger Facebook users."
The most successful young technology companies have a history of doing things differently. Google's IPO prospectus contained a letter from its founders to investors that said the company believed in the motto "Don't be evil."
Facebook
declined to comment, but Reena Aggarwal, a finance professor who has
studied IPOs at Georgetown University's McDonough School of Business,
believes Zuckerberg will emulate Google's philosophy, at least in
principle.
Founders Larry Page
and Sergey Brin wanted an IPO accessible to all investors, and said so
in their first regulatory filing. Facebook may say something similar
when it files to declare its intention to sell stock publicly.
Along
with Wall Street investment banks, Google used a Dutch auction, named
for a means of selling flowers in Holland, to sell its shares. It took
private bids and allowed investors to say how many shares they wanted
and what they were willing to pay.
The
process wasn't smooth, though, and Google had to slash its expected
offer price at the last minute. If you bought at the IPO, for roughly
$85 a share, you still did well: Google closed Tuesday at $580.
More
recently, when it filed for an IPO last June, Groupon, which emails
daily deals on products and services to its members, added a letter from
its 30-year-old founder, Andrew Mason.
"We
are unusual and we like it that way," the letter said. "We want the
time people spend with Groupon to be memorable. Life is too short to be a
boring company."
It's almost become conventional for tech
companies to include an unconventional letter when they make their stock
market debut. It's widely expected that Zuckerberg, in the very least
measure of showmanship, will write one.
But
IPO watchers wonder whether there might be a provision specifically
designed to give the little-guy investor, even the casual Facebook user
who doesn't invest, a piece of the debut.
"There is a feeling that there will be something unique in store for Facebook users," Aggarwal says.
When
most companies go public, they let Wall Street investment banks handle
everything, with the sweet ground-floor stock price reserved for big
institutional investors.
But
that probably won't do for Facebook, created in a Harvard University
dorm room eight years ago. Or Zuckerberg, whose antiestablishment
credentials include spurning a $15 billion takeover offer from
Microsoft.
Few expect
Zuckerberg to offer a Dutch auction because of the Google experience.
But he is at least as unorthodox as Google's founders. People expect him
to be in the driver's seat on Wall Street, rather than hand over the
controls to bankers.
Facebook is a vital part of people's Internet
lives and the most successful company in the history of social media.
Its closest competitor, Google+, has less than a tenth the active
membership — 60 million people.
"While
there is no such thing as untouchable, Facebook is getting near there,
with even Google imitating it," says Sweet, of IPO Boutique.
In
"really hot IPOs," 90 percent of the shares go to institutional
investors and 10 percent to everyday investors, Sweet says. It's a perk
for the banks' biggest clients, like Fidelity Investments or T. Rowe
Price or hedge funds.
The funds pay big commissions to the banks
for regularly trading large blocks of stocks or bonds. Those
relationships are deep and long-lasting — and lucrative for the banks.
The funds expect to be rewarded.
But
Morgan Stanley and Goldman Sachs, the banks expected to guide the
Facebook IPO, are in an awkward place: They don't want to tick off 800
million Facebook users — but they don't want to tick off Fidelity,
either.
Most IPOs are
underpriced, and the stock usually shoots up the first day. Lucky large
investors get the basement price and usually a big payday if they sell
on the first day. Smaller investors buy on the open market, after the
price has spiked, and pay more.
And most early investors do sell.
One university research paper found that about 70 percent of the new
stock changes hands in the first two days. Groupon introduced 35 million
shares, but on the first day its shares were traded almost 50 million
times.
Ann Sherman, associate
professor and IPO expert at DePaul University, raised the possibility
that Facebook could set aside a portion of its shares for the small
investor and use a lottery system if there is a lot of demand.
She says the U.S. is the only country without IPO rules that put traditional investors on an equal footing.
the social network that changed "friend" from a noun to a verb, is
expected to file as early as Wednesday to sell stock on the open market.
Its debut is likely to be the most talked-about initial public offering
since Google in 2004.
The
Menlo Park, Calif.-based company expects to raise as much as $10
billion, though some accounts say it could be less than that. At $10
billion, the company would be valued at $75 billion to $100 billion.
The
highly anticipated documents Facebook files with the Securities and
Exchange Commission will reveal how much it intends to raise from the stock market, what it plans to do with the money and details on the company's financial performance and future growth prospects.
A stock usually starts trading three to four months after the filing.
Around
the nation, regular investors and IPO watchers are anticipating some
kind of twist — perhaps a provision for the 800 million users of
Facebook, a company that promotes itself as all about personal
connections, to get in on the action.
After all, Facebook founder Mark Zuckerberg
is anything but a conformist. He turns up at business conventions in a
hoodie. "Cocky" is the word used to describe him most often, after
"billionaire." He was Time's person of the year at 26. So when he takes
Facebook public, why would he follow the Wall Street rules?
"Pandemonium
is what I expect in terms of demand for this stock," says Scott Sweet,
senior managing partner at IPO Boutique, an advisory firm. "I don't
think Wall Street would want to anger Facebook users."
The most successful young technology companies have a history of doing things differently. Google's IPO prospectus contained a letter from its founders to investors that said the company believed in the motto "Don't be evil."
declined to comment, but Reena Aggarwal, a finance professor who has
studied IPOs at Georgetown University's McDonough School of Business,
believes Zuckerberg will emulate Google's philosophy, at least in
principle.
Founders Larry Page
and Sergey Brin wanted an IPO accessible to all investors, and said so
in their first regulatory filing. Facebook may say something similar
when it files to declare its intention to sell stock publicly.
Along
with Wall Street investment banks, Google used a Dutch auction, named
for a means of selling flowers in Holland, to sell its shares. It took
private bids and allowed investors to say how many shares they wanted
and what they were willing to pay.
The
process wasn't smooth, though, and Google had to slash its expected
offer price at the last minute. If you bought at the IPO, for roughly
$85 a share, you still did well: Google closed Tuesday at $580.
More
recently, when it filed for an IPO last June, Groupon, which emails
daily deals on products and services to its members, added a letter from
its 30-year-old founder, Andrew Mason.
"We
are unusual and we like it that way," the letter said. "We want the
time people spend with Groupon to be memorable. Life is too short to be a
boring company."
It's almost become conventional for tech
companies to include an unconventional letter when they make their stock
market debut. It's widely expected that Zuckerberg, in the very least
measure of showmanship, will write one.
But
IPO watchers wonder whether there might be a provision specifically
designed to give the little-guy investor, even the casual Facebook user
who doesn't invest, a piece of the debut.
"There is a feeling that there will be something unique in store for Facebook users," Aggarwal says.
When
most companies go public, they let Wall Street investment banks handle
everything, with the sweet ground-floor stock price reserved for big
institutional investors.
But
that probably won't do for Facebook, created in a Harvard University
dorm room eight years ago. Or Zuckerberg, whose antiestablishment
credentials include spurning a $15 billion takeover offer from
Microsoft.
Few expect
Zuckerberg to offer a Dutch auction because of the Google experience.
But he is at least as unorthodox as Google's founders. People expect him
to be in the driver's seat on Wall Street, rather than hand over the
controls to bankers.
Facebook is a vital part of people's Internet
lives and the most successful company in the history of social media.
Its closest competitor, Google+, has less than a tenth the active
membership — 60 million people.
"While
there is no such thing as untouchable, Facebook is getting near there,
with even Google imitating it," says Sweet, of IPO Boutique.
In
"really hot IPOs," 90 percent of the shares go to institutional
investors and 10 percent to everyday investors, Sweet says. It's a perk
for the banks' biggest clients, like Fidelity Investments or T. Rowe
Price or hedge funds.
The funds pay big commissions to the banks
for regularly trading large blocks of stocks or bonds. Those
relationships are deep and long-lasting — and lucrative for the banks.
The funds expect to be rewarded.
But
Morgan Stanley and Goldman Sachs, the banks expected to guide the
Facebook IPO, are in an awkward place: They don't want to tick off 800
million Facebook users — but they don't want to tick off Fidelity,
either.
Most IPOs are
underpriced, and the stock usually shoots up the first day. Lucky large
investors get the basement price and usually a big payday if they sell
on the first day. Smaller investors buy on the open market, after the
price has spiked, and pay more.
And most early investors do sell.
One university research paper found that about 70 percent of the new
stock changes hands in the first two days. Groupon introduced 35 million
shares, but on the first day its shares were traded almost 50 million
times.
Ann Sherman, associate
professor and IPO expert at DePaul University, raised the possibility
that Facebook could set aside a portion of its shares for the small
investor and use a lottery system if there is a lot of demand.
She says the U.S. is the only country without IPO rules that put traditional investors on an equal footing.