Facebook may raise $5 billion in an IPO as soon as tomorrow, down from a reported $10 billion.
NEW YORK (TheStreet) - Facebook could file its IPO as soon as tomorrow, according to reports, but there's growing chatter that the offering size may be cut to make it more attractive to investors.
Citing sources close to the deal, the IFR Web site reported on Tuesday that Facebook wants to start off with a conservative base of investors, before deciding whether to increase the size of the offering. Facebook is eyeing a $5 billion IPO, smaller than originally planned.
Scott Sweet, Managing Director of IPO Boutique said Facebook is not seeing a lack of demand for its shares, but may have cut the size of the offering from a reported $10 billion to $5 billion to woo investors.
"Perhaps Facebook is doing a very small offering to make it more attractive," he noted. "It also allows them to do many more secondaries at a further time."
Sweet also explained that both Groupon(:GRPN) and Zynga(:AAPL) cut the size of their original offerings, despite both having "monster demand."
IFR reports that Morgan Stanley(:MS) is going to be the lead bookrunner on the IPO.
Goldman Sachs(:GS), Barclays Capital(:BCS), Bank of America Merrill Lynch(:BAC) and J.P. Morgan(:JPM) are the other bookrunners on the deal, according to IFR.
Facebook is supposedly planning to file its IPO on Wednesday. This would allow it to start trading around May, the article noted.
If Facebook files its prospectus tomorrow, it will be the first time the Palo Alto, Calif.-based company has given the public a chance to look at its financials. The company reportedly had revenue of over $4 billion last year, but nothing has been confirmed.
Facebook shares have recently stopped trading on private exchanges, which prompted speculation that a major announcement was coming. Recent valuations pegged the social networking firm around $80 billion, but the proposed $10 billion offering may have valued Facebook at $100 billion.
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--Written by Chris Ciaccia in New York
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