Facebook Set to File For $5 Billion IPO Wednesday: Report

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Facebook CEO Mark Zuckerberg.

Social networking giant Facebook is expected to file documents for its long-awaited initial public offering on Wednesday morning, according to a new report by International Financing Review, a Thomson Reuters publication. IFR said the 7-year-old company will seek to raise $5 billion.

IFR said Facebook has chosen Morgan Stanley as the lead bookrunner — occupying the highly-desirable “lead left” slot on the IPO prospectus — for the offering. Goldman Sachs, Bank of America Merrill Lynch, Barclays Capital and JP Morgan will also participate on the deal, IFR said.

The “lead left” bank leads the IPO underwriting process — its name in the upper-left-hand corner of the actual prospectus — and typically receives higher fees than the other banks in the syndicate. Goldman Sachs and Morgan Stanley had reportedly battled over that status for Facebook’s IPO. Previous reports suggested that Morgan Stanley won out because Facebook was displeased with Goldman’s botched, $1.5 billion private placement in the company shares last January, in which the bank ran afoul of SEC rules and was forced to close the offering off to U.S. investors.

Facebook will file its IPO prospectus with the Securities and Exchange Comission, which will scrutinize the company’s financial statements. Potential public market investors will also get a chance look at Facebook’s books for the first time.

At $5 billion, Facebook’s IPO would raise less than had been expected — reports had indicated the company might seek as much as $10 billion — but IFR said Facebook could increase the number depending on investor demand. A more conservative raise isn’t such a bad idea, given that several recent Internet IPOs have underperformed. Both discount sales website Groupon and web-radio service Pandora saw their stock prices fall after going public.

Facebook’s actual offering  — when it will become available on public markets for investors to trade — won’t occur until the spring, with several reports suggesting late May.

As of Tuesday, Facebook was trading at a valuation of $83.5 billion on Sharespost, a private market.

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