Facebook is reportedly paying the investment banks involved with its initial public offering a very low fee of 1.1%, according to reports on Bloomberg and The Wall Street Journal. Assuming a $5 billion IPO (as indicated in their original registration statement), this means the banking syndicate will share $55 million in underwriting fees. If the IPO reaches $10 billion, then the banking syndicate will share $110 million in underwriting fees, not bad for a few months of work.
Morgan Stanley (lead left), JP Morgan and Goldman Sachs are lead joint book-running managers of Facebook's IPO, and BofA Merrill Lynch, Barclays and Allen & Co are co-joint book-running managers. Citi, Credit Suisse, Deutsche Bank, RBC Capital Markets and Wells Fargo are co-managers and a number of smaller firms will participate in the syndicate.
Investment banks typically receive fees of 7 percent in small IPOs, and lesser amounts for very large IPOs. Zynga paid bankers 3.25% in its billion dollar IPO in December of last year and Groupon paid bankers 6% in its $700 million IPO in November of last year. Google paid bankers 2.8% in its $1.67 billion IPO in 2004.
Venture capital investors in Facebook include Accel Partners, Andreessen Horowitz, Elevation Partners, Founders Fund, Greylock Partners, Kleiner Perkins Caufield & Byers, Meritech Capital Partners, Millennium Technology Value Partners and Technology Crossover Ventures.
Links to articles:
Bloomberg: Facebook Is Said to Plan Paying 1.1 Percent Fee to Banks
http://www.bloomberg.com/news/2012-03-19/facebook-is-said-to-plan-paying-1-1-percent-fee-to-banks.html
WSJ.com: Facebook IPO: Divvying Up the Underwriting Fees
http://blogs.wsj.com/deals/2012/03/20/facebook-ipo-divvying-up-the-underwriting-fees/?KEYWORDS=facebook+ipo
Morgan Stanley (lead left), JP Morgan and Goldman Sachs are lead joint book-running managers of Facebook's IPO, and BofA Merrill Lynch, Barclays and Allen & Co are co-joint book-running managers. Citi, Credit Suisse, Deutsche Bank, RBC Capital Markets and Wells Fargo are co-managers and a number of smaller firms will participate in the syndicate.
Investment banks typically receive fees of 7 percent in small IPOs, and lesser amounts for very large IPOs. Zynga paid bankers 3.25% in its billion dollar IPO in December of last year and Groupon paid bankers 6% in its $700 million IPO in November of last year. Google paid bankers 2.8% in its $1.67 billion IPO in 2004.
Venture capital investors in Facebook include Accel Partners, Andreessen Horowitz, Elevation Partners, Founders Fund, Greylock Partners, Kleiner Perkins Caufield & Byers, Meritech Capital Partners, Millennium Technology Value Partners and Technology Crossover Ventures.
Links to articles:
Bloomberg: Facebook Is Said to Plan Paying 1.1 Percent Fee to Banks
http://www.bloomberg.com/news/2012-03-19/facebook-is-said-to-plan-paying-1-1-percent-fee-to-banks.html
WSJ.com: Facebook IPO: Divvying Up the Underwriting Fees
http://blogs.wsj.com/deals/2012/03/20/facebook-ipo-divvying-up-the-underwriting-fees/?KEYWORDS=facebook+ipo
