Facebook's Expected 2012 IPO Sparks Heated Competition Among Banks (Report)
Goldman Sachs Group and Morgan Stanley are among the frontrunners vying for a piece of Mark Zuckerberg's social network, according to reports.
As Facebook prepares for its initial public offering, expected in the second quarter of this new year, the biggest investment banks are facing off for a leading chunk of the social networking giant.
The Wall Street Journal reports that the Mark Zuckerberg-masterminded company has been taking meetings with Wall Street firms since Thanksgiving, with Goldman Sachs Group Inc. and Morgan Stanley the frontrunners.
According to the newspaper, Facebook could soon file its IPO offering; it's projected to raise as much as $10 billion, thereby valuing it at $100 billion or beyond. (Fees for comparable IPOs have averaged 2.2 percent, the WSJ said, translating into a potential grand payoff of some $220 million.)
Without ruling out competitors, Goldman and Morgan Stanley are considered the top contenders for the Facebook prize: last January, the former led a private offering of $1.5 billion in Facebook shares; meanwhile, Morgan Stanley has been the No. 1 bank for Internet IPOs on a global scale.
But even if Goldman loses out on the deal, it could still win big: if Facebook gets valued at $100 billion, the securities firm would then see its stake in the company doubled for a profit of $375 million. (With that earlier $1.5 million investment, the firm purchased less than 1 percent of Facebook.) Additionally, Goldman stands to rake in another $100 million on fees that clients paid to invest in the company as part of the private fund.
"There was a period in Microsoft's evolution where they said, we want to put a computer on everyone's desk," Zuckerberg, who's traded his trademark Adidas flip-flops for Brooks running shoes, said in an interview last month. "That's the way that I want to run Facebook. ... We want to be operating in a way that we're working towards this longer vision of where we think the world should be."