Facebook to pay banks 1.1% fee (rumor)
If true, the percentage is significantly smaller than the typical rate for IPOs. On the other hand, Facebook is going public fairly late in the game, and hence its $5 billion IPO. Assuming this number doesn't change, though many expect it will increase, the banks will make $55 million.
Facebook originally started with six major banks as its underwriters: when the company released all its IPO numbers last month, Morgan Stanley received the coveted lead left role. "Lead left" refers to where the top underwriter's name appears on the IPO prospectus. Also on the initial list of bookrunners on the deal were J.P. Morgan, Goldman Sachs, Bank of America Merrill Lynch, Barclays Capital, and Allen & Company.
Two weeks ago, Facebook doubled its credit facility to $5 billion, secured a $3 billion bridge loan, and added 25 more underwriters to its IPO filing. This brought the total number of banks to 31. Since Morgan Stanley is the lead underwriter, it will likely earn a bigger cut of the total.
Here is the full list of 31 underwriters that will have to figure out how to split the IPO fee:
- Morgan Stanley & Co. LLC
- J.P. Morgan Securities LLC
- Goldman, Sachs & Co.
- Merrill Lynch, Pierce, Fenner & Smith Incorporated
- Barclays Capital Inc.
- Allen & Company LLC
- Citigroup Global Markets Inc.
- Credit Suisse Securities (USA) LLC
- Deutsche Bank Securities Inc.
- RBC Capital Markets, LLC
- Wells Fargo Securities, LLC
- Blaylock Robert Van LLC
- BMO Capital Markets Corp.
- C.L. King & Associates, Inc.
- Cabrera Capital Markets, LLC
- CastleOak Securities, L.P.
- Cowen and Company, LLC.
- Lazard Capital Markets LLC
- Lebenthal & Co., LLC
- Loop Capital Markets LLC
- M.R. Beal & Company
- Macquarie Capital (USA) Inc.
- Muriel Siebert & Co., Inc.
- Oppenheimer & Co. Inc.
- Pacific Crest Securities LLC
- Piper Jaffray & Co.
- Raymond James & Associates, Inc.
- Samuel A. Ramirez & Company, Inc.
- Stifel, Nicolaus & Company, Incorporated
- The Williams Capital Group, L.P.
- William Blair & Company, L.L.C.
The newly-added 25 banks will be fighting over very small percentages, but they will still mean at least five figures in fees.
See also:
- How much is Facebook worth?
- Facebook files for $5 billion IPO
- Facebook's IPO in pictures and Facebook's IPO by the numbers
- Facebook updates IPO filing to underline Zynga deal
- Facebook details Zuckerberg's $500,000 salary, 45% bonus
- Mark Zuckerberg bought Facebook shareholders' votes for $100
- Facebook secures $5 billion credit line, adds 25 underwriters