Facebook took social media by storm after the company filed the preliminary prospectus for its long waited initial public offering, which the company is seeking to raise $5 billion. Inside the document, there are some huge numbers about the company were revealed. The number goes from 845 million active users to 2.7 billion daily likes and comments. After the initial news of the filling broke out, a more extensive look of the document reveals hard evidence of the company’s business, competition, growth and something about what’s in store for the future. In some particular terms, “advertising” and “mobile” show more than 100 times throughout.[74]
The New York Post reported that Facebook CEO Mark Zuckerberg has told Morgan Stanley, Goldman Sachs, JP Morgan Chase and other banks that are involved the value of $75 billion to $100 billion IPO in his company, which is use to stop leaking details to the press about the upcoming event. “We often talk about inventions like the printing press and the television- by simple making communication more efficient, they led to a complete transformation of many important parts of society. They have more people a voice. They encouraged progress. They change the way society was organized. They brought us closer together,” said Zuckerberg in the Facebook IPO documents.[75]
In Zuckerberg’s four-page message to potential investors, it provides a glimpse into what a 27-year-old CEO believes are Facebook’s priorities moving forward. To most of the users, Facebook act as a simple space to socialize with friends and raise digital farms. However, the recreational utility is way far from the limits Zuckerberg. He writes that “through the power of sharing content, Facebook has the potential to increase understanding of other by people across the planet.”
Here are some of the quotes from Zuckerberg’s letter of the company’s IPO, which can explain the company’s main values.
“People sharing more- even if just with their close friends or families- creates a more open culture and leads to a better understanding of the lives and perspectives of others.”
“We think a more open and connected world will help create a stronger economy with more authentic business that build better products and services.”
“We don’t build services to make money; we make money to build better services.”
“We have a saying: ‘Move fast and break things.’ The idea is that if you never break anything, you are probably not moving fast enough.”[76]
After the IPO, Zuckerberg will retain a 22% ownership share in Facebook and will own 57% of the voting shares.[77] http://en.wikipedia.org/wiki/History_of_Facebook
Facebook's underwriting team, which also includes JPMorgan Chase (JPM, Fortune 500) and Goldman Sachs (GS, Fortune 500), said the company is expected to sell shares somewhere in the range of $34 to $38 as of Tuesday. That's up from $28 to $35 previously disclosed. The company is expected to announce its official offering price after the market closes Thursday and begin trading on Nasdaq under the ticker FB (FB) on Friday.
Morgan Stanley and the other underwriters will be calling up clients hourly on Thursday to weigh demand at each price range before they set the final price.
To do it right, Morgan Stanley needs to leave its clients wanting more.
"Bankers want to have institutional buyers thirsting for more," said Alan Denenberg, a partner at the law firm Davis Polk who worked on the IPO of online reviews site Yelp (YELP). "You want unfulfilled appetite so investors go buy dessert in the aftermarket."
Should Morgan Stanley and the other banks underprice Facebook, the IPO could cost the social network tens of millions of dollars. Facebook would essentially be leaving money on the table. But if the banks overprice the offering, the underwriters risk scaring away long-term investors.
"There's a genuine inherent conflict in pricing the IPO," said Lise Buyer, founding principal of the Class V Group, who worked on Google's (GOOG, Fortune 500) offering. "The [investment banks] are trying to serve both buyers and sellers. The buyers are the big institutions that are clients of the bank each and every single day." facebook-underwriters
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