Is Facebook Being Ignorant or Just Trying to Follow in Google’s (GOOG) Footsteps?
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Following news Facebook is planning to launch its IPO during the second quarter of 2012, rumors have emerged suggesting the company’s CFO, David Ebersman, maybe looking to go at the process alone.
According to a WSJ story late Monday, Facebook is looking to file a $10 billion IPO with the SEC sometime this year. Sources suggest the king of social media may be valued at more than $100 billion.
The WSJ is now saying Ebersman has talked with bankers in an effort to determine whether the institutions could add anymore value to the deal.
Some analysts believe Facebook might indeed be able to handle the IPO process on its own, while others feel the CFO's move may just be an effort to garner more negotiating leverage with the banks. The WSJ notes there are potentially $200 million in fees bankers could gain from the deal. Sources are saying Goldman Sachs (NYSE: GS) and Morgan Stanley (NYSE: MS) are best positioned to be the main banks running the underwriting.
Facebook may also look to take a similar path Google (Nasdaq: GOOG) took with its IPO back in 2004. The non-traditional electronic auction method was developed by WR Hambrecht & Co., and became less well know and used following the dot com bubble. The hybrid electronic auction method attempts to sort investors by their bidding price.
Its assumed the method worked out pretty well for Google as the company's IPO fee only ended up being 2.8 percent of the total package, substantially lower than the 3.9 percent average for comparable deals.
According to a WSJ story late Monday, Facebook is looking to file a $10 billion IPO with the SEC sometime this year. Sources suggest the king of social media may be valued at more than $100 billion.
The WSJ is now saying Ebersman has talked with bankers in an effort to determine whether the institutions could add anymore value to the deal.
Some analysts believe Facebook might indeed be able to handle the IPO process on its own, while others feel the CFO's move may just be an effort to garner more negotiating leverage with the banks. The WSJ notes there are potentially $200 million in fees bankers could gain from the deal. Sources are saying Goldman Sachs (NYSE: GS) and Morgan Stanley (NYSE: MS) are best positioned to be the main banks running the underwriting.
Facebook may also look to take a similar path Google (Nasdaq: GOOG) took with its IPO back in 2004. The non-traditional electronic auction method was developed by WR Hambrecht & Co., and became less well know and used following the dot com bubble. The hybrid electronic auction method attempts to sort investors by their bidding price.
Its assumed the method worked out pretty well for Google as the company's IPO fee only ended up being 2.8 percent of the total package, substantially lower than the 3.9 percent average for comparable deals.
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