FACEBOOK is expected to file within hours to sell stock on the open market in what will be the most talked-about initial public offering since Google in 2004, maybe since the go-go 1990s.
Around the nation, regular investors and IPO watchers are anticipating some kind of twist - perhaps a provision for the 800 million users of Facebook, a company that promotes itself as all about personal connections, to get in on the action, which is expected as early as today.
"Pandemonium is what I expect in terms of demand for this stock," says Scott Sweet, senior managing partner at IPO Boutique, an advisory firm. "I don't think Wall Street would want to anger Facebook users."
The most successful young technology companies have a history of doing things differently.
Google's IPO prospectus contained a letter from its founders to investors that said the company believed in the motto "Don't be evil".
Facebook declined to comment, but Reena Aggarwal, a finance professor who has studied IPOs at Georgetown University's McDonough School of Business, believes Mark Zuckerberg will emulate Google's philosophy, at least in principle.
Founders Larry Page and Sergey Brin wanted an IPO accessible to all investors, and said so in their first regulatory filing.
Facebook may say something similar when it files to declare its intention to sell stock publicly.
Facebook is expected to raise as much as $US10 billion ($A9.45 billion), which will value the company at $US75 billion to $US100 billion, making it one of the largest IPOs.
A stock usually starts trading three to four months after the filing.
The highly anticipated filing will reveal how much Facebook intends to raise from the stock market, what it plans to do with the money and details on its own financial performance and future growth prospects.
Along with Wall Street investment banks, Google used a Dutch auction, named for a means of selling flowers in Holland, to sell its shares. It took private bids and allowed investors to say how many shares they wanted and what they were willing to pay.
The process wasn't smooth, though, and Google had to slash its expected offer price at the last minute. If you bought at the IPO, for roughly $US85 a share, you still did well: Google closed today at $US580.
More recently, when it filed for an IPO last June, Groupon, which emails daily deals on products and services to its members, added a letter from its 30-year-old founder, Andrew Mason.
It's almost become conventional for tech companies to include an unconventional letter when they make their stock market debut. It's widely expected that Mr Zuckerberg, in the very least measure of showmanship, will write one.
But IPO watchers wonder whether there might be a provision specifically designed to give the little-guy investor, even the casual Facebook user who doesn't invest, a piece of the debut.
"There is a feeling that there will be something unique in store for Facebook users," Ms Aggarwal says.
When most companies go public, they let Wall Street investment banks handle everything, with the sweet ground-floor stock price reserved for big institutional investors.
But that probably won't do for Facebook, created in a Harvard University dorm room eight years ago.
Or Mr Zuckerberg, whose anti-establishment credentials include spurning a $US15 billion takeover offer from Microsoft.
Few expect Zuckerberg to offer a Dutch auction because of the Google experience. But he is at least as unorthodox as Google's founders.
People expect him to be in the driver's seat on Wall Street, rather than hand over the controls to bankers.
Ann Sherman, associate professor and IPO expert at DePaul University, raised the possibility that Facebook could set aside a portion of its shares for the small investor and use a lottery system if there is a lot of demand.
But Mr Zuckerberg will also probably be careful how he plays his cards. He doesn't want to anger Facebook users, but his primary goal is to raise money.
The recent experience of Groupon's faltering IPO holds tough lessons for young entrepreneurs.
After analysts started questioning its accounting, Groupon had to amend its regulatory filing several times.
Other companies have encountered problems when they went public and tried to reward customers.
Upstart internet phone company Vonage wanted to give customers a chance to buy up to 15 per cent of its 31 million shares at its IPO at $US17 apiece.
But when the shares fell 13 per cent on the first day of trading, many of its small investors that had put in orders to buy didn't want to pay the offer price.
It gained the dubious title of one of the worst IPOs that year, something Facebook wants to avoid.
REF: "http://www.heraldsun.com.au/news/breaking-news/facebook-initial-public-offering-expected-within-hours/story-e6frf7ko-1226259216780"
