Facebook targets retail investors
Not too long ago, as people were debating the likelihood of a Facebook IPO, some held out hope that the company would offer some sort of "surprise" for loyal customers, one that would allow them to invest in the company perhaps via the Facebook site.
That surprise never quite materialized, but that doesn't mean the company doesn't want retail investors, which are disadvantaged when trying to get their hands on hot IPOs, to own the stock. It most certainly does.
DealBook reports that "there may be a sliver of hope. Facebook's executives and underwriters have discussed raising the number of shares that will go to retail investors, say people briefed on the matter who were not authorized to speak on the record. It is not known how much will eventually go to these mom-and-pop investors, but Wall Street executives estimate that the retail share could be as much as 20 to 25 percent of the offering. Some of that increase is likely to go to brokerage firms like TD Ameritrade or E*Trade, which cater to small investors."
Retail investors in bull markets can be a powerful source of liquidity, and Facebook will no doubt be a very hot offering among the legions of Facebook users. Meanwhile, the company has established a price range of $28 and $35, which would value the company at $77 billion to $96 billion. My sense is that we'll see some tinkering on the upside. Underwriters will push the upper bound higher over the next few weeks.