January 27, 2012 - PrivCo sources say that Facebook plans to file its long-awaited IPO documents early this Wednesday morning (late Tuesday night). The filing would confirm an earlier PrivCo report that this week’s freeze in Facebook’s processing of secondary market trades indicated the IPO document had been completed and that the filing was imminent.
PrivCo understands that Morgan Stanley has just been selected to lead the IPO, along with Goldman Sachs as co-lead underwriter. Morgan Stanley however will take the more prestigious “lead left” position (i.e., the first name on the S-1 document). This also means that Morgan Stanley’s bankers will be managing Facebook’s IPO road show as the “first among equals,” including introducing Mark Zuckerberg and Facebook COO, Sheryl Sandberg at Facebook’s IPO road show appearances.
As previously stated by PrivCo, Morgan Stanley’s vaunted tech banking team would be tapped by Facebook to lead the IPO, both because Morgan has had the strongest track record in the consumer Internet IPO space in the past year, as well as being able to leverage the power of Morgan Stanley Smith Barney’s hundreds of thousands of retail investor accounts. Small retail investors are the least price sensitive buyers of familiar Internet companies including Facebook and LinkedIn, making Smith Barney Morgan’s secret weapon in placing Internet IPO shares, something Goldman lacks.
PrivCo expects valuation to be between $90 - 95 billion to ensure the stock pops after trading. With Facebook’s fully diluted shares being approximately 2.35 billion shares according to PrivCo calculations, initial price talk will be $38-$40/share.
PrivCo also expects Facebook to select the New York Stock Exchange rather the tech heavy NASDAQ on which recent IPOs from Groupon, Zynga and others have debuted. PrivCo research shows that Facebook’s NYSE ticker expected to be “FB.”