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
Chipotle Mexican Grill Inc. (CMG)Monday announced that it will launch a new summertime loyalty rewards program, as the Mexican restaurant tries to lure back customers to its outlets after a series of food-related disease outbreak. The three-month-long promotion, called Chiptopia Summer Rewards, will... Japanese messaging service Line Corp. announced its decision to delay the setting of a price range for its initial public offering by one day, until Tuesday, citing the chaos caused by Brexit in global markets. Line was actually planning to announce the IPO price range on Monday, June 27, and the... Fujifilm launched a new version to its tiny instant printer line up. The new upgraded version, Instax Share SP-2, can be used to print photographs from smartphones in a faster pace.
comments powered by Disqus
Follow RTT