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Contrary to popular opinion, the main intent of a tech IPO is not to bring funds into the company, it is to make the staff and investors rich. This occurs when staff are vested with shares or when early investors buy a significant share of the company (perhaps half to one percent) for a relatively small amount of money.
Previously, I reported that the Facebook stock would launch on Monday May 21st. More recent reports are suggesting that the launch will be Friday 18th, although a Friday launch does seem a little strange. We can only wait and see.
Many commentators are suggesting that very few shares in the IPO will be available for small investors, that the investment bankers with direct access to the float are rationing them to favoured clients.
As the IPO roadshow winds its way around the country, suggestions have been made that the stock will be priced between $28 and $35, raising a little over $10B. A total of 337.42M shares are to be sold - 180M owned by the company and another 157.4M owned by insiders, including 30.2M by Zuckerberg which will be used to pay taxes in relation to previous share allocations.
With all of this in mind, what will happen to the share price ones it is floated?
