logo
Share SHARE
FONT-SIZE Plus   Neg

Reports: Facebook To Pay Underwriters 1.1% Fee In IPO

Facebook will pay only a 1.1 percent fee to the 31 underwriters of its much anticipated initial public offering, according to media reports on Monday. The rate is said to be much smaller than the 6 percent to 7 percent fee that is typical on Wall Street.

But Facebook's underwriters are reportedly willing to share a smaller fee as the absolute size of the payout for the high-profile IPO will still be large. They are also said to be lured by the promise of being bankers in future to the world's largest social networking site.

Menlo Park, California-based Facebook disclosed in a regulatory filing in February that it has filed for an IPO of up to $5 billion of its Class A common stock, valuing the company at about $100 billion. The social networking site intends to apply to list its common stock under the symbol "FB".

Assuming Facebook raises $5 billion from its IPO, its underwriters will get $55 million. Morgan Stanley, the lead underwriter, will probably earn a bigger cut of the total.

In early March, Facebook said it added 25 new underwriters and secured two new credit facilities totaling $8 billion as it prepares for its IPO.

The new underwriters that have been added include banks such as Citigroup Inc., Credit Suisse Group AG, Deutsche Bank AG, RBC Capital Markets LLC and Wells Fargo Securities LLC. Facebook also added 20 smaller companies as underwriters. The additions take the total number of underwriters for its IPO to 31.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

Business News

Editors Pick
Seafood lovers must now be prepared to dole out more cash than before for salmon. The price of salmon has surged globally and is now at historic highs amid acute outbreaks of sea lice. According to data from the Nasdaq Salmon Index, the price of salmon has risen by more than 15 percent in the last three months. Health-food restaurant chain Freshii Inc. has increased the price range for its initial public offering in Canada. Freshii has raised the price range for its IPO to C$10 to C$11.50 per share from the prior range of C$8.50 to C$10.0 per share, BNN reported. Drug major Johnson & Johnson Tuesday said it expects higher earnings and sales for its fiscal 2017, which are below market estimates. The company also reported solid fourth-quarter results, with adjusted earnings above market estimates, while sales missed their view, despite a growth. In pre-market activity on the NYSE, Johnson & Johnson shares were losing 1.68 percent.
comments powered by Disqus
Follow RTT