The Banking and Strategy Initiative

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Facebook fairly priced already? | Deal insight

The coming Facebook IPO could already be priced to the $80 -100 bln mark that the company wants to price to garner $10 bln in the 10% equity sold in the IPO in May.

Also on the cards is the biggest price sale by the investment bankers as Equity underwriting and lead managing together for leading contenders Goldman Sachs and Morgan Stanley will yield less than 1% according to latest reports of their bids also from todays WSJ FT and others

While IPOs of greater than $1 bln ( normally get the bankers 4-5% of the IPO, already reduced from a normal IPO’s 6-8%, the i-bankers also charge a premium on Silicon Valley IPOs that can afford it . The average Valley IPO including Google cost companies’ 5.8%. However Mark Zuckerberg likes his status updates and apparently the i-bankers like them too!

(We like our status updates too, all 30000 of them, wonder what each will beget in valuation ?)

As Reuters Breaking Views (Watch Rob Cox views on Insider) pushes and we wondered, it is likely however that the current private trades that make investors Microsoft, Russian DST Technologies and Goldman Sachs unbelievably rich, could mean that investors sell out at this $100 bln high valuation and the IPO could well be the last card for the House of Cards so reminiscent of the Digital Economy’;s barebones revenues that caused the 2001 bust.

Image representing Mark Zuckerberg as depicted...

Image via CrunchBase

However even 2001 had a 6 year old Amazon going strong and Facebook is one phenomenon whose status updates could be targeting a $600 bln valuation ahead of the World’s highest valued company Apple which recently crossed a $400 bln valuation. For $600 bln, investors will have to last the entire Social /Media / Facebook movement which could well last 20 years even as no one assumes Facebook like Windows will ever leave our primary Web screens whether Tablet or PC or other.

Also, coming up the week’s Superbowl winner could mean bad tidings for the S&P 500 this year ( despite it being an election year) as Portugal’s markets deign it ready for the chops

The selection of the Merchant banker was also made/unmade by the updates as Facebook is likely considering changing its decision after Friday put Morgan Stanley firmly in the lead for Goldman Sachs having no tmade the founder too happy during the earlier Private placement. the result would likely be known by Wednesday when the S1 is filed

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This entry was posted on January 30, 2012 by in Amitonomics, Dealbook, Financial Markets, Global, Mergers etc, Private Equity, Social Media, US.


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