The drumbeat to Facebook’s imminent IPO filing is growing stronger. On Wednesday, Bloomberg reported a three-day halt in trading on the secondary markets. And today, the Journal says it could happen as soon as next Wednesday with Morgan Stanley in the plum spot as lead underwriter
Typically, companies issue a halt in trading in order to figure out how many shareholders they have or so that investors aren’t able to buy or sell until the information is public.
The timing to file isn’t certain and nothing has been announced regarding Morgan Stanley, although the Journal says its a “strong frontrunner for the much-coveted ‘lead left’ position on Facebook’s IPO documents.”
Facebook is reportedly looking to raise a $10 billion IPO which would value the company at $100 billion. So it’s little surprise that Goldman Sachs and Morgan Stanley are rehashing the same battle they bought for Groupon, except with much higher stakes (and, we imagine, less of a shameful, dirty feeling after.)
“The race to lead the management of the company’s IPO has been one of the most competitive contests on Wall Street in the past year. For investment banks, leading the offering will likely mean tens of millions of dollars in fees as well as bragging rights.”
As with Groupon, where Morgan Stanley and Goldman co-lead the deal, but with Morgan Stanley in the choice lead left spot, Facebook will likely choose at least two banks:
“The IPO is likely to have two or more active managers, people familiar with the matter said. Morgan Stanley rival Goldman Sachs Group Inc. is expected to play a significant role in the deal, according to people familiar with the matter. As a result, Goldman also would likely also snag significant fees.”
But being denied the lead position would be egg on Lloyd Blankfein’s perpetually-smiling face and a reminder of Goldman’s public disaster of a private placement for $1.5 billion in Facebook shares last January that had to be withdrawn for U.S. investors. Mr. Blankfein, says the Journal, has “actively courted at least one Facebook board member in an attempt to win the deal.”
But that’s hardly the only rivalry in play. With equity trading down 16 percent from last January and the European economy in a tailspin, “bitter rivals” Duncan Niederauer and Robert Greifeld, the heads of the New York Stock Exchange and the NASDAQ respectively, have set their sights on what Goldman Sachs types might call “a white elephant, flying pig & unicorn all at once,” only less mythical.
“It’s a very heated battle,” Larry Tabb, founder of capital markets advisory firm Tabb Group, tells the Post, adding, “Facebook won’t significantly change the listing revenues for these companies but there could be a real halo effect wherein other companies decided to list with whichever wins Facebook.”
Indeed, both exchanges have been cozying up to Startupland to lay the groundwork earlier. NASDAQ with its trendy new Tumblr and hackathon sponsorships and NYSE playing host to Business Insider’s SAI 100 party.