Breaking News
FONT-SIZE Plus   Neg
Share SHARE

Reports: Facebook To Pay Underwriters 1.1% Fee In IPO

RELATED NEWS
Trade GOOG now with 

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.

Register
To receive FREE breaking news email alerts for Google Inc. and others in your portfolio

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

Business News

Editors Pick
After reporting four consecutive monthly increases, the National Association of Realtors released a report on Monday showing an unexpected drop in U.S. existing home sales in the month of August. NAR said existing home sales fell 1.8 percent to a seasonally adjusted annual rate of 5.05 million in August. The European Central Bank remains ready to use additional unconventional tools to counter risks to the inflation outlook and to boost the euro area economy, ECB President Mario Draghi said on Monday. "The Governing Council remains fully determined to counter risks to the medium-term outlook for inflation," Draghi said in Brussels. Stocks have moved to the downside in early trading on Monday, giving back some ground after moving mostly higher last week. The major averages have all dipped into negative territory, although selling pressure has remained somewhat subdued.
comments powered by Disqus
FREE Newsletters, Analysis & Alerts

 

Stay informed with our FREE daily Newsletters and real-time breaking News Alerts. Sign up to receive the latest information on business news, health, technology, biotech, market analysis, currency trading and more.