Facebook IPO could be WAY SMALLER than expected

Okay, there's going to be a lot about the Facebook IPO here today (even compared to our usual coverage, which is probably a bit much). It's just the nature of the beast. It's still too soon to tell if Facebook is actually going to file its S-1 today, but rumors are already swirling about the details. According to UPI, Facebook might be filing for a $5 bn IPO instead of the $10 bn that had long been assumed. Also, it appears to have picked MS)" href="http://www.insideipo.com/tag/morgan-stanley">Morgan Stanley as its lead bank.

The possibility of a $5 bn capital raise is pretty interesting. If Facebook goes at the $100 bn valuation, it would be a 5 percent float – positively tiny. Even smaller than Groupon's tiny float. Even at a $75 bn valuation, $5 bn would constitute a small offering. This has been the trend in the tech sector for the past year, with LinkedIn, Zillow, Pandora and Zynga also selling relatively small amounts of stock at their IPOs.

As to the investment banks, UPI reports that Morgan Stanley has picked up the ‘lead left' position on the IPO prospectus, prevailing over GS)" href="http://www.insideipo.com/tag/goldman-sachs">Goldman Sachs. Goldman is still involved in the IPO, and is joined by BAC)" href="http://www.insideipo.com/tag/baml">Bank of America Merrill Lynch's wealth management group, Barclays Capital and JPM)" href="http://www.insideipo.com/tag/jp-morgan">JP Morgan.

Click here for FREE email alerts from Inside IPO >>

Source: UPI

Photos: Kevin Cortopassi via Flickr