Who Stands to Benefit from Facebook’s IPO?
According to the S1 filing made by Facebook on February 1st to the SEC announcing its intention to sell shares, Mark Zuckerberg owns 28 percent of Facebook stock, giving him controlling interest of the company regardless of the amount of stock the company plans to float.
Major Facebook InvestorsAfter Zuckerberg, a number of other major investors and co-founders stand to gain substantially from their investment in Facebook.
- Accel Partners – 10 percent
- Digital Sky Technologies – 10 percent
- Dustin Moskovitz – 6 percent
- Eduardo Saverin – 5 percent
- Sean Parker – 4 percent
- Peter Thiel -3 percent
- Greylock Partners – 1.5 percent
- Meritech Capital Ventures – 1.5 percent
- Microsoft – 1.3 percent
- Li Ka Shing – 0.75 percent
- Interpublic Group – 0.5 percent
A total of over a thousand Facebook employees will reportedly become instant millionaires after the IPO, which represents only a fraction of the company’s projected valuation after the offering.
Investment Bankers and Their CustomersIn addition to the owners of Facebook stock, 31 underwriters will receive Facebook stock to redistribute to their customers at the IPO price. The complete list of underwriters includes:
- Morgan Stanley & Co. LLC
- J.P. Morgan Securities LLC
- Goldman, Sachs & Co.
- Allen & Company LLC
- Barclays Capital Inc.
- Merrill Lynch
- RBC Capital Markets, LLC
- Citigroup Global Markets Inc.
- Credit Suisse Securities (USA) LLC
- Deutsche Bank Securities Inc.
- Muriel Siebert & Co., Inc Blaylock Robert Van LLC
- BMO Capital Markets Corp.
- C.L. King & Associates, Inc.
- Cabrera Capital Markets, LLC
- CastleOak Securities, L.P.
- Cowen and Company, LLC.
- Loop Capital Markets LLC
- Lazard Capital Markets LLC
- Lebenthal & Co., LLC
- Raymond James & Associates, Inc.
- M.R. Beal & Company
- Macquarie Capital (USA) Inc.
- Oppenheimer & Co. Inc.
- Pacific Crest Securities LLC
- Piper Jaffray & Co.
- Stiffel, Nicolaus & Company, Incorporated
- Samuel A. Ramirez & Company, Inc.
- Wells Fargo Securities, LLC
- The Williams Capital Group, L.P.
- William Blair & Company, L.L.C.
Facebook has reserved the symbol FB, although it is still unclear whether the stock will trade on the Nasdaq or on the New York Stock Exchange.
Other BeneficiariesOne unlikely beneficiary of the anticipated Facebook IPO is Korean American artist David Chloe. Chloe painted murals at Facebook’s first office building, and instead of collecting several thousand dollars for his work, asked for an equivalent amount of Facebook stock. According to some estimates, Chloe will be able to cash out with more $200 million.
Yahoo has recently filed litigation against Facebook for patent infringement on ten of its patents. Yahoo sued Google in 2004 just before its IPO, and received cash and Google stock as a settlement. Facebook may settle the case with Yahoo sooner than later just to be clear ahead of the IPO.
Other social media sites and their investors also stand to benefit from the Facebook IPO, since Facebook will be looking to acquire its competitors with part of the huge cash infusion they will receive after the IPO.
The IPO market in general will also benefit substantially. Since the dot.com bust in the early 2000s, the number of companies going public has declined considerably. The Facebook IPO will undoubtedly stimulate new IPOs.
Nevertheless, in some way everyone will benefit from the huge Facebook IPO, as researchers have concluded that start-up companies have been responsible for 100 percent of job growth in the United States since the 1970s, with many of those jobs were created after the start-ups had their IPOs.
Published on Mar 19, 2012By InvestorGuide Staff
Posted in ...Market Commentary