The drip-drop of financial news about Facebook‘s impending initial public offering is starting to turn into a downpour. The company is planning to file its initial prospectus on Wednesday morning, Reuters is reporting, with the intention of raising a conservative $5 billion.
The report, through Reuters subsidiary International Financing Review, also answers the question of which bank will lead — Morgan Stanley. The others will include Bank of America Merrill Lynch, Barclays Capital, JP Morgan, and Goldman Sachs, which had appeared to be in the lead position last year after it helped Facebook raise a $1.5 billion late-stage round. However, issues around that funding may have contributed to Morgan Stanley getting the top spot.
If everything goes as planned with the SEC’s review, Facebook will likely go public in May.
The general IPO time-frame has already been widely reported. The most interesting part of this latest news, if you’re not a banker, is the relatively low amount that Facebook is seeking. Previous reports had put it seeking up to0 $10 billion. Considering the middling performance of other recent tech IPOs, Facebook appears to be wary of selling too much stock before it knows more about how the market feels. For now, the valuation and share price are still unknown, although shares on private secondary markets are currently selling at prices that would make it worth above $80 billion.
Facebook is the world’s largest social network, with over 1 billion monthly active users. Facebook was founded by Mark Zuckerberg in February 2004, initially as an exclusive network for Harvard students. It was a huge hit: in 2 weeks, half of the schools in the Boston area began demanding a Facebook network. Zuckerberg immediately recruited his friends Dustin Moskovitz, Chris Hughes, and Eduardo Saverin to help build Facebook, and within four months, Facebook added 30 more college networks. The original...