May 04, 2012

You and your family spend more time on Facebook than at the family dinner table. It knows more about you and your life than maybe even you do. You'd think the web site loaded with your personal facts, photos and connections would make their IPO available to you and me. Think again.

As The Wall Street Journal and other media outlets report that the Facebook IPO - the one that I thought would herald the psychological start of the recovery from this recession - might be worth $28 to $35 per share, it might only be available to heavy hitters.

Are Google and Facebook stealing tomorrow's quant stars?

According to Dealbook, we civilians won't be able to get in on the $100 billion action.

Depending on the size of the offering, Facebook will end up paying more than $100 million in fees to the underwriters. The firms that receive the most in underwriting fees typically get the biggest number of retail shares. In the case of Facebook, that is likely to be Morgan Stanley, which has a large network of brokers. Those shares are highly coveted and typically go to the firm's top-producing brokers - and their best clients.

One Wall Street broker, who declined to be named, citing his firm's policy against speaking to the media, said that financial advisers who specialize in initial public offerings will also be at the top of the list of brokers getting a Facebook allocation.

A side note: isn't it odd that Apple is selling at $569.92 per share - and that's down 2.02 percent?

Does your hedge fund want a piece of the Facebook action? What do you think its price will be one year after it goes public? Tell me at palbinus@techweb.com.

ABOUT THE AUTHOR
Phil Albinus is the former editor-in-chief of Advanced Trading. He has nearly two decades of journalism experience and has been covering financial technology and regulation for nine years. Before joining ...