If one’s relationship with Facebook required a status, it would probably be “complicated” for most. Like with Netflix and its chief executive Reed Hastings, who could face a civil action over a status update that allegedly violated disclosure rules. Oh, and also for this girl… Read more
The full Citigroup blast against Nasdaq’s handling of the Facebook IPO is well worth a read. (Big hat-tip to NYT Dealbook, click to enlarge)
Google spits out about 1,690,000 search results for “facebook lock up expiry”.
It’s not exactly been a state secret that early investors in Facebook could start selling their stakes from today, when 271m shares lurch down the slipway. You could say the share price had been trying to price in this supply in recent days. Another 1.6bn shares will exit lock-up periods from now to early next year. It’s all known about, surely. Read more
Another bad day for Facebook shareholders. It looks like the latest plunge — which took the shares below the $30 level — has something to do with the start of option trading this morning. The shares have dropped to new lows, down around 7.9 per cent at pixel time.
Successful or not, Facebook’s IPO has taught us one very important thing over the last two days.
The blogosphere/Twittersphere knows extremely little about greenshoe IPO mechanics. And yet, because who shouts loudest makes the most waves…the idea that Morgan Stanley had “lost face” on the IPO due to its commitment to take on shares at $38 “at a burden” to itself managed to linger around far too long for comfort. Read more
Update after the close: It closed green(shoe) at $38.23 according to Bloomberg data. But not until after a few moments close to $38.00, as seen below earlier…
After an open of $42.05, against the $38 IPO price, Facebook stock quickly reverted to the sale price on Friday — at which level we presume those banks with the over-allotment mandate (MOST, JPM, GS) will have been very busy indeed. Read more
Is life as we know it gonna change after 11am New York time on Friday?
Will Mark Zuckerberg be crowned emperor of the dweebs (just as Napoleon was crowned emperor of the French exactly 208 years ago today) or will he fall flat on his puli sheepdog? Read more
1) It’s a punchy IPO pricing range.
2) Ooh look at the insider seller amounts. Read more
We’re still trying to get our heads round this at pixel time (Yahoo killer?) but here’s the release:
In the initial AOL auction, Microsoft secured the ability to own or assign approximately 925 U.S. patents and patent applications plus a license to AOL’s remaining patent portfolio, which contains approximately 300 additional patents that were not for sale. Read more
Kara Swisher reports that it’ll be for $1bn in cash and shares. From a note posted to Facebook by Mark Zuckerberg:
The California State Teachers’ Retirement System, Calstrs, has called for Facebook to split the role of chairman and chief executive and to appoint a woman to its all-male board for the first time, the FT reports. Calstrs, one of the biggest US public pension funds, is already invested in Facebook through its private equity holdings, and will pick up shares through index-tracking after its IPO. Calstrs’ demand for shareholders to be given voting powers according to the size of their stake will be a tough request to meet, however. Facebook has revealing in filings that Mark Zuckerberg paid nominal sums to other shareholders in agreements to gain enormous voting clout, says NYT Dealbook. Read more
Bearish traders are adding to bets against social networking companies, despite a surge in share prices of groups like LinkedIn and Renren after Facebook’s announcement of flotation plans last week, the FT reports. LinkedIn, the professional networking website, and Renren, the Chinese social network, have seen the number of their shares borrowed and sold, a proxy for short selling, reach the highest levels since their public debuts last year. Short selling in Groupon and Zynga also touched post-initial public offering highs last week, according to Data Explorers, which collects stock-lending data. Bearish bets on social networking groups have risen as many traders worry that valuations of companies such as Groupon and Zynga were artificially inflated after each group’s IPO floated only a small percentage of shares, often about 10 per cent. Groupon and Zynga have just 2.2 per cent and 2.5 per cent of their total shares sold short. But because a large portion are not publicly traded, this means that over 90 per cent of their available shares are utilised for shorting, according to Data Explorers. Read more
Reuters reports that Google and Facebook have reacted to a court directive in India on Monday warning them of a potential crackdown by authorities if they do not take steps to protect religious sensibilities. The two companies are among 21 that have been asked to block potentially offensive material. The move, off the back of private petitions to the court, have stoked fears over censorship. Last year, a law was passed in India that made companies like Google responsible for user-generated content on their sites, giving them 36-hours to take down content deemed offensive once there has been a complaint. The WSJ reports that the content in question in this case involved images of religious figures. These have since been taken down by Google but only on its localised India domain, making the content still available elsewhere. Read more
Facebook plans to roll out ads on mobile devices – a medium where it has so far struggled to make headway – to open another source of revenue ahead of its IPO. reports the FT. The company warned in its IPO filing last week that a failure to extract “meaningful revenue” from mobile users was a risk to its business. The “sponsored stories” will begin appearing in March, in advance of the IPO in May. Facebook’s dilemma is that its mobile users are increasing much faster than its overall user growth rate, but they are eight times less likely to click on online advertisements, the NYT says. Read more
Facebook already has so much cash, and so little desire for true shareholder control, that it should really call its IPO off instead of “gratifying” its venture capital backers and employees, the FT’s John Gapper writes in a must-read column. Investors have reacted warily to Facebook’s suggested $75bn-$100bn valuation of 100 times price to earnings, says Reuters. Google emerged on public markets in 2005 with a price 218 times its earnings, but was valued at $23bn at the time. Facebook’s price tag would make it worth 53 per cent of Google’s current valuation, despite the latter company earning 10 times the profit, notes the WSJ. Read more
Facebook launched the process for its highly anticipated stock market debut, filing papers for a $5bn initial public offering that will turn key shareholders into billionaires, most notably Mark Zuckerberg, the 27-year-old chief executive and co-founder, the FT reports. Mr Zuckerberg’s 28.4 per cent stake would give him a paper worth of $22.7bn, based on secondary market trading, valuing Facebook at $80bn. More striking is the absolute control Mr Zuckerberg will retain over the company. He and his close allies own 57 per cent of the company, guaranteeing that he will be able to run Facebook more like the mission-driven public trust he envisioned in his Harvard dorm room eight years ago than a public company beholden to investors. “Facebook exists to make the world more open and connected, and not just to build a company,” he wrote in a letter to investors in the filing. “Simply put: we don’t build services to make money; we make money to build better services.” Read more
Facebook launched the process for its highly anticipated stock market debut, filing papers for a $5bn initial public offering that will turn key shareholders into billionaires, most notably Mark Zuckerberg, the 27-year-old chief executive and co-founder, reports the FT. Mr Zuckerberg will retain absolute control over the company. He and his close allies own 57 per cent. Mr Zuckerberg’s own 28.4 per cent stake would give him a paper worth of $22.7bn, based on secondary market trading, valuing Facebook at $80bn. Separately, the FT says Facebook’s figures suggest that its advertising base has yet to develop as far as many of its supporters had hoped – though it has already achieved strong profitability. The WSJ says Facebook’s annual revenue growth is slower than other tech companies who have staged IPOs recently. Read more
The strangest thing just appeared in our Facebook…
IFR reports that Facebook is expected to file the preliminary prospectus for its long-anticipated IPO on Wednesday. It is expected that the offering will raise $5bn, though this could be increased to meet investor demand. Filing now should allow the company to complete the process by May. The coveted lead bookrunner role has gone to Morgan Stanley. Meanwhile the WSJ reports on a surge in the stock prices of social media companies in China where Facebook is blocked. Read more
Facebook’s filing on Wednesday is set to price its initial public offering at some $5bn, but could be increased in response to investor demand, IFR reports. Guiding the IPO will be David Ebersman, Facebook’s quiet but no-nonsense chief financial officer, says AllThingsD. “Facebook is not taking chances with this IPO and wants to make it a blue-chip event,” one source told AllThingsD. Ebersman has pushed to keep banks’ fees in the offering low. Read more
Facebook is expected to submit paperwork to regulators on Wednesday morning for a $5bn initial public offering and has selected Morgan Stanley and four other bookrunners to handle the mega-IPO, IFR says, citing sources close to the deal. Morgan Stanley will take the coveted “lead left” role in what is expected to be the largest IPO ever to emerge from Silicon Valley, with the other four bookrunners being 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. Getting picked for the IPO is a coup for Morgan Stanley and Michael Grimes, the global co-head of the bank’s technology investment banking unit, says Bloomberg. The group won the biggest share of business underwriting US initial offers by internet companies last year, and taking the lead on Facebook may catapult it to the top of the US IPO league table for a third consecutive year. Read more
Facebook’s lawyers have introduced a three-day suspension of trading in the unlisted company’s shares on secondary markets, says Bloomberg, citing people with knowledge of the matter. While buy and sell orders can be made, transactions won’t be processed by Fenwick & West from January 25 to January 27. The halt pertains to trading of Facebook shares only, one of the people said. Facebook is considering an IPO expected to raise about $10bn this year, but one of the sources said the suspension did not necessarily mean the filing is imminent. The WSJ meanwhile looks at the efforts of Morgan Stanley and Goldman Sachs to win the coveted “lead left” spot for the IPO. Read more
Facebook is targeting a timeframe of April to June 2012 for an IPO that would value the company at more than $100bn, the WSJ says, citing people familiar with the matter who say it is exploring raising about $10bn. Bloomberg says this would make it by far the biggest technology IPO, almost doubling the current record holder, Infineon, which raised $5.23bn in 1999. Read more
Facebook’s share price has fallen 8 per cent since July, to $32.10 in a SharesPost auction held last week, valuing the entire company at roughly $77bn, the Wall Street Journal reported on Thursday. The fact that the once-dizzying rise in the value of privately owned Facebook has slowed is possibly a sign that the social network hasn’t been immune to broader market volatility or the weakness in the global economy, the paper says. Facebook is still expected to make one of the largest US initial public offerings ever next year. Until then, the stock continues to trade on secondary marketplaces where wealthy investors and institutions can purchase shares offered mostly by former employees. Facebook share prices surged 70 per cent to $34 in March from December. Bur investors and analysts warn the price of Facebook’s stock, owned mostly by employees and outside investors, can’t easily be pinned down because trades take place in a variety of venues, some of which don’t disclose the prices, the WSJ says. Valuations based on just a few buyers and sellers might not be reflective of how a company would be valued if millions of shares were traded publicly.
Spotted on page 66 of Citigroup’s epic Tuesday report on “Social Media, E-payments & the new Digital Market”, a neat depiction of the talent war among some the big digital media firms:
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