The Facebook IPO: Everything We Know

The year is ending with yet another flurry of speculation on some of the details of Facebook's potential IPO.
As the stories go over the same ground again and again, we thought it would be useful to step back and look at what we know about the most anticipated transaction of 2012.
Will Mark Zuckerberg cash in without Wall Street bank's help? What will the IPO value Facebook at? When will the social site finally go public?
Read this and when the next round of reporting comes along, you'll know what's new, what's not and what's important.
Which Banks Will Lead The IPO?
The two leading contenders to be 'lead left': Goldman Sachs and Morgan Stanley.
After the public scrutiny of Facebook's private offering run by Goldman, there were reports that the bank's relationship with Facebook was 'frayed' (or just fine) but it has nonetheless been consistently linked to the transaction, as has the leading participant in 2011 tech IPO's, Morgan Stanley.
Or Will The Answer Be "None"
This could be the big twist in the story.
There is an outside chance that Facebook, because of the anticipated strong demand for its shares, could bypass the investment banks by using a 'Dutch auction.'
If Facebook went this route, shares would be allocated based on bids entered by potential investors. While there is likely to be continued speculation on this point, it has an outside chance of happening at best.
Why? Risk aversion. Founders get to go public once. Yes, using banks increases the costs of doing so on several fronts (fees, artificially low pricing, etc.). But Google's attempt to go it alone were less than successful. And when incremental costs are compared to the risks posed by the Dutch auction, a founder will take Wall Street any day.
Basically, the Dutch auction is rarely used, whereas the traditional process happens on a weekly basis. When billions of your capital are at stake, it's not crazy to lose a few million, or tens of millions, in order to ensure your cash in stays in the realm of nine zeros.
How Much Will A Public Facebook Be Worth?
Around $100 billion seems to be the going estimate, with the initial public float being around $10 billion.
But really, this won't be finalized until the size of the stake sold and share price are finalized.
See the rest of the story at Business InsiderPlease follow SAI on Twitter and Facebook.
See Also:
- Here Are The 2 Pieces Of New Information In The Wall Street Journal's Latest On Facebook's IPO
- Mark Zuckerberg Riding A Water Buffalo
- THE MICROSOFT INVESTOR: Fire Ballmer, Double The Dividend, Restructure Online And The Stock Is A Buy
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