BEHIND THE VEIL: Facebook IPO was a Windfall for These Banks
After the market close on Friday, representing its first day of trading as a public company, Facebook (NASDAQ:FB) amended its S-1 to include a full prospectus listing the number of stock sold by underwriters. Leading the way was Morgan Stanley (NYSE:MS) with 162.1 million shares ($6.15 billion).
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J.P. Morgan (NYSE:JPM) followed with 84.8 million ($3.22 billion), while Goldman Sachs (NYSE:GS) rounded out the top three with 63.1 million shares ($2.4 billion). Overall, the list included 33 different firms for a total of 421, 233, 615 shares. But not all shares were distributed equally.
E*Trade Securities LLC (NASDAQ:ETFC) and Itaú BBA USA Securities got the short straws as they each received only $80 million in stock. This amount represented the least amount for any underwriter even thought the two firms sat in the middle of the prospectus’ prior versions.
It might not be the worst thing as none of the banks made a lot of money on Facebook’s stock. Its shares closed only $0.23 above its IPO price from Friday. While Facebook (NASDAQ:FB) raised the maximum amount in its offering, the underwriters didn’t have as large a cash windfall as they had expected.