Facebook to file $5 billion IPO Wednesday: IFR

NEW YORK Tue Jan 31, 2012 6:29pm EST

Sixteen year old Danieli Riva looks at her facebook page at a public internet service in Juan Pablo II shanty town in Villa El Salvador,Lima January 31, 2012. REUTERS/Mariana Bazo

Sixteen year old Danieli Riva looks at her facebook page at a public internet service in Juan Pablo II shanty town in Villa El Salvador,Lima January 31, 2012.

Credit: Reuters/Mariana Bazo

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NEW YORK (Reuters) - Facebook is expected to submit paperwork to regulators on Wednesday morning for a $5 billion initial public offering and has selected Morgan Stanley and four other bookrunners to handle the mega-IPO, sources close to the deal told IFR.

The company founded by Mark Zuckerberg in a Harvard dorm room in 2004 picked Morgan Stanley to take the coveted "lead left" role in what is expected to be the largest IPO ever to emerge from Silicon Valley.

The $5 billion is a preliminary target and could be ramped up in coming months in response to investor demand, IFR added.

The other four bookrunners chosen were Goldman Sachs, Bank of America Merrill Lynch, Barclays Capital and JP Morgan, although the underwriting syndicate could be expanded later, IFR cited the sources as saying.

Facebook declined to comment on the report by IFR, a unit of Thomson Reuters. "Lead left" refers to where the top underwriter's name will appear on the IPO prospectus.

The preliminary IPO filing sets the stage for a May market of the world's largest social network, IFR reported, a coming-out party that will dwarf almost any before that, including Google Inc's $2 billion IPO.

IPO VETERAN CLINCHES DEAL

Morgan Stanley's experience in arranging major Internet IPOs - including those of Groupon and Zynga - helped it clinch a pivotal role after an unusually secretive selection process, IFR reported.

Final pricing would not be set for several months, during which the size of the IPO could be increased should investor demand warrant it, IFR added.

The prospective IPO - expected to be one of the largest U.S. market debuts in history - has whipped up a frenzy of investor and media speculation this month, buoying shares in social media peers from RenRen to LinkedIn and igniting fierce competition on Wall Street.

The IPO - a prized trophy for any investment bank - likely set a new standard for how low its arrangers are willing to go on advisory fees to win big business, analysts say.

Silicon Valley start-ups from Zynga and LinkedIn to Groupon and Pandora Media Inc have since last year begun testing investor appetite for a new wave of dotcoms, with mixed results.

Investors last year had warned of a second dotcom bubble inflating, after LinkedIn doubled on its debut; but the so-called over-enthusiasm has waned in recent months.

The last dotcom player to debut, Zynga, closed 5 percent below its IPO price during its first trading day in December.

(Writing by Edwin Chan)

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Comments (2)
I overheard a conversation near the water cooler where a guy was saying excitedly, “Did’ya hear about the Facebook IPO? Damn, that’s the only experience I can imagine that bests sex!” (Laughter, snickers from others in the vicinity of water cooler.)

Jan 31, 2012 7:30pm EST  --  Report as abuse
beancube2101 wrote:
So it will be hedged as another borrowing account for the inner circle bankers to expand our economy with credit swapping scams. Don’t we have any anti-trust law for too big to fail credit swap scams yet, fellow Americans?

Feb 01, 2012 12:41am EST  --  Report as abuse
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