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Facebook Orders Banks To Stop Leaking IPO Details
redletterdave writes "In the weeks leading up to Facebook's massive $100 billion initial public offering, Mark Zuckerberg reportedly told JPMorgan Chase, Morgan Stanley, Goldman Sachs and the other banks involved in the IPO to stop leaking information to the media. Zuckerberg was reportedly unhappy that the banks leaked details about his company's Wall Street debut, including the Feb. 1 date it chose to file its S-1 paperwork with the SEC. Facebook execs are also miffed about the subtle rivalry between Morgan Stanley and Goldman Sachs, which were jockeying to become the lead underwriter for the IPO, the largest since Google's $1.7 billion offering in 2004. The banks are heeding Zuckerberg's warning, urging their employees to keep quiet about Facebook's filing, because disobeying Zuckerberg's wishes could mean getting dropped from one of the most lucrative IPOs in recent memory. The banks stand to make $40 million from their deals with Facebook."
that doesn't compute...
It's $5B, isn't it? I mean, come on, basic facts too much to ask?
Poor means hoping the toothache goes away.
Remember, a pop in the stock price isn't a sign of success - it's a sign that your underwriter priced your stock too low and you got shafted.
Facebook should have a clause that if the stock pops more than 10% on opening day the lead underwriter must pay them at least 70% of the lost proceeds:
Price: $100/share
Opens: $180/share
Payout from lead underwriter: $56/share
That'll make sure that the models are accurate. The only reason to go to these guys is to maximize the cash you get for your company. Your job isn't to make them and their clients more money.
...Zuckerberg et al. don't know what "Leak" means...
Do not look into laser with remaining eye.
As most of the important information is already out or is just me ?
Why is that piece of shit of a website worth so much?
(insert XKCD-of-the-day about sheeples here)
But then how are all those 1% investment bank insiders supposed to find out enough about the IPO to make any money? ;^) ;^(
Clearly, Zuck doesn't know how things are supposed to work
Facebook did, however, sell the names, addresses, and friend lists of every user who has made negative comments about the Wall Street firms involved in its IPO.
Have gnu, will travel.
Aren't SEC filings like this public documents?
Government's idea of a balanced budget: take money from the right pocket to balance...oh who am I kidding?
Sounds like Zuckerberg forgot to change the default privacy settings from public to private.
Maybe Facebook should adjust its privacy settings.
There are things that Facebook doesn't want to share with the world? Now they know how we feel when Facebook fails at honoring basic Privacy settings.
Basically, there are reasons to love this model for everyone involved except the John Q public who get shafted on IPO day with stock that has already had the full value sucked out by the private investors.
disobeying Mark Zuckerberg could mean "unfriending" you on Facebook
Don't worry, the insiders will still get the information.
Actually, this is pretty ironic considering that Zuckerberg wants everything to be public. Now, we know the guy has limits.
It's all about bucks, kid. The rest is conversation.
Sig this!
Why don't more companies use an IPO auction format so anyone that wants shares can get them? Google did it and it seemed to work out ok for them:
http://online.wsj.com/article/SB125045821555835141.html
It seems more fair for the individual investor - if they want in on an IPO, they can do it, they don't have to be an "insider".
It seems better for the company - their stock gets issued at the maximum price the market is willing to pay, so they get the best valuation they can get.
Of course, it's bad for the banks since they don't get insider shares to give to their preferred investors who all get to share in the "pop" after the IPO. This pop does no one any good except the insiders that got to buy the shares at the IPO price. It's money that the company left on the table, they should have priced higher.
Oh wait, I guess I answered my own question - banks would never go for it for most companies. But, like Google, Facebook had the clout to force it on them.
", Mark Zuckerberg reportedly told JPMorgan Chase, Morgan Stanley, Goldman Sachs and the other banks involved in the IPO to stop leaking information to the media."
Hmmmm.. seems some body wants it both ways....
So hows that feel ?????
Ahahhhhh poor whiner baby not getting it his way... aaaaah.. too bad loser.
When are you facedorqs going to wise up and quit using this crap and twidiot as well.
To the banks, KEEP LEAKING THE INFO!
For those that don't know it Der Furher has selected things for the setup of the company from board to other items which means Der Furher will decide.
1311393600 - Back to Black
They say this will be a $100 billion IPO, then they say it's the largest since Google's $1.7 billion. So it's MUCH bigger than Google's. Does the author not know how that phrase works? When you say this is the largest since X, X is supposed to be bigger than this. Otherwise you go further back to find something bigger, or say it's the largest ever.
So, let me try to get this straight. Is Zuckerberg complaining about a corporation that facebook is compelled to interact with using facebook's "personal" data in ways that, while protected by his terms of agreement with said corporation, are disliked and overly revealing, and he wishes they would stop or at least have explicitly asked him first?
To that, sir, I say, suck it.
Returned Peace Corps IT Volunteer
Sorry Zuckerberg, the banks changed their privacy policy. Your information now belongs to them to use or sell as they see fit... sound familiar?
Seven puppies were harmed during the making of this post.
According to what I have read, last year's profits were about $1 billion. Very impressive actually, but not worth $100 billion.
It seems to me that facebook has to be it's membership saturation point, so no super-fast growth.
I could see facebook worth $20 billion, but not much more than that.
Switching over from the realm of complete fantasy:
- Stock valuation is a highly imprecise exercise because it is driven by factors that have a great deal of uncertainty attached to them. Unless you're going to come up with some highly specific theory for what the company's earnings are going to be twenty years from now, your valuation model will at some point include a growth rate element. This growth rate affects company value to an extreme degree. The price you choose as an entry price will naturally have one implied growth rate, but if the marketplace feels the true growth rate differs by 1-2% in either direction then the price will immediately adjust enormously to reflect this.
- That naturally kills off any clauses where the underwriter pays the company. It's a pipe dream to think any firm would do business it considers likely to be unprofitable, so the alternative is that the "basic fee" is increased 10-fold and you get a punishment clause on top of that.
- It actually doesn't affect Facebook that much if the price goes from 100 to 180. This is only 5% of the shares, remember? Total value of the company coming in at 2% lower. That's a day's fluctuation for many firms.
- As for why you have a clear interest in underpricing an IPO, there's a nice article here: http://dealbook.nytimes.com/2011/05/27/why-i-p-o-s-get-underpriced/
If banks are releasing confidential information to the press, imagine the confidential information they're releasing to their buddies and other insiders. Bankers are corrupt and insider trading is rampant. Another reason Wall Street needs more regulation rather than less.
Fast Federal Court and I.T.C. updates
He's,some pig,some pig
Some terrific, radiant, humble pig
He is some pig
Oh wow look at him now
Zuckerberg's famous pig
Sooey, what do you see
The greatest hog in history
Fine swine wish he was mine
What if he's not so big
He's some terrific, radiant, humble
Thingamajig of a fine phenomenon
My land isn't it grand
Zuckerberg's famous pig
Golly, you got to agree
He's a real celebrity
Fine swine, wish he was mine
What if he's not so big?
He's some terrific radiant, humble
Thingamajig pig
The terrific,.radiant, (Humble x2)
Zuckerberg's x5
Zuckerberg's famous pig
Isn't it ironic that Zuckerberg doesn't like it when the privacy of FaceBooks IPO is violated when his business model is to gather as much private information about the users of FaceBook as possible. There is an old saying that seems to apply here...
"What's good for the goose should be good for the gander!"
"The banks stand to make $40 million from their deals with Facebook"
Um, how? Whose ass did they get those numbers from, Mark Zuckerberg's? They had their first negative membership month already, a gigantic competitor just popped up, just about 100% of their customers hate them, and their stocks are overvalued on top of all of that. How is anyone going to make a penny on this bullshit? Correct answer: people who show up to the bankruptcy server auction. I would suggest investing heavily in U-Haul reservations and plane tickets.
I would like to purchase 10k worth of shares please.
Sincerely
Poor unemployed IT worker
Public will lose their money, since data is increasingly being forbidden by govt regulation(present & future) rules to be miss-used in many countries. So Facebook valuation MAY drop post IPO & public investors MAY loose money.
Coming from the man who said that privacy was a thing of the past, I find this title highly ironic.
The Wise adapts himself to the world. The Fool adapts the world to himself. Therefore, all progress depends on the Fool.
Quicksilver is what pops into my mind. The harder Facebook starts squeezing their users for money, the faster they disappear.
To date, no social media company has survived itself, not one. Everyone we loved and used is gone. Facebook already shows serious signs of loosing users and users that just dont use its service anymore. This makes the pressure on the remaining users harder per buck. Thus more jump ship and the process looks like squeezing quicksilver.
... to generate a lot of media buzz and excitement around an IPO.
It's reality-TV on Wall St.
Zuckerberg should have complained to the SEC and then used a different, more reputable, bank.
Chase (JPMorgan) gave me all of Facebooks IPO details. Thanks Chase!