Facebook sees itself as "the people's company," DealBook reports, and will therefore look to provide some small investors with the chance to get in on its massive IPO, due to land later this month. According to some estimates, the amount of retail shares available could reach up to 25 percent of the 337 million shares offered and go to brokerage firms like E*Trade that serve the Everyman. Yesterday, the company announced an estimated price of $28 to $35 a share, putting its value just south of $100 billion.
"I would love to get Facebook stock," said millions of people. Just don't bank on it.
It's the job of lead underwriter Morgan Stanley, along with JPMorgan Chase and Goldman Sachs, to allot a huge amount of shares to institutional investors, like major mutual funds, and then some crumbs go to the common folk, kind of. DealBook explains:
Depending on the size of the offering, Facebook will end up paying more than $100 million in fees to the underwriters. The firms that receive the most in underwriting fees typically get the biggest number of retail shares. In the case of Facebook, that is likely to be Morgan Stanley, which has a large network of brokers. Those shares are highly coveted and typically go to the firm’s top-producing brokers — and their best clients.
One Wall Street broker, who declined to be named, citing his firm’s policy against speaking to the media, said that financial advisers who specialize in initial public offerings will also be at the top of the list of brokers getting a Facebook allocation.
The other option? "Friend someone in Facebook’s executive suite." Or just sit back and watch the show, which will eventually make a select few really rich or very upset.