Facebook is connecting with Mom and Pop. The world’s most popular social media site has added an online trading firm to group of firms underwriting its IPO — and is serving up a video for potential investors that might well have made George Eastman cry. It’s the longest Kodak moment ev-uh.
Individual investors and financial advisers have been fretting that they won’t be able to get any shares ever since the world’s most popular social media website announced plans to go public. Well, it looks as if Facebook is throwing the wall flowers of investing a little bouquet. E*Trade, the popular low-cost online trading firm, has been invited to join the Facebook debutante ball. Quite a surprise.
The New York Times Dealbook spotted the latest addition to the selling group, and learned from one insider that Facebook was reaching out a little more assertively to retail investors because “it sees itself as ‘the people’s company.’” The Times sources say retail could get 20% to 25% of the $10.6 billion deal.
In February, when Facebook first announced plans for its initial public offering, Morgan Stanley won the lead spot for selling the shares, with Goldman Sachs and JP Morgan as bridesmaids. A number of observers scoffed at the Wall Street party bringing the most important IPO of the decade to market. It was the complete anti-Google deal. Insular. Elitist. And so puzzling for a company that is all about connecting the world.
Over the past couple of months, Facebook has expanded the number of underwriters to 31, including small shops like Lebenthal & Co., better known for municipal bonds than stocks. Yesterday, Facebook revealed that it planned on selling stock at a price that would value the company somewhere between $85 billion and $95 billion — slightly lower than originally expected. The company also expanded the selling group to 33 members.
Even so, the shares will be hard to come by. Demand is expected to be intense. And because Nasdaq changed the rules on when Facebook can be added to its most important sub-index — Nasdaq 100 — a large number of professional investors will need to buy the shares, and in size. So Mom and Pop, we love you, but don’t expect too many shares from us. As one disgruntled commenter on Seeking Alpha notes: Even E*Trade has plenty of $1 million-plus accounts. Pah-lease. The little guy?
So, even if you don’t get any of the shares in the IPO, you can still sit back and enjoy the retail roadshow video. If it doesn’t reach into your heart and make you go “aw’ then at the very least, it seems designed to make the world believe that the social media phenomenon is grown up enough, savvy enough, and nimble enough to be a public company. Some highlights:
- Mark Zuckerberg, in a gray T-shirt and jeans (no hoodie) in an impassioned monologue for the Facebook mission. Before Facebook (that means you, Google), there was the Internet. But it was missing something. People. Facebook provides the magic ingredient. If you make it to the end of the video, you’ll learn that Zuckerberg envisions every app in the world will be integrated into Facebook. Of course, he doesn’t mention that users are free to ignore this option.
- Babies & pets. Facebook is not for just students and other hipsters. It’s for families. And people who like to eat out. It’s the personal newspaper of our lives. Zip through scenes so cute you might feel a tear welling up as the camera pans across still shots and videos of first-year birthday parties, a child getting tossed into a snowbank, and a dewy eyed pet in a big overstuffed chair.
- Mobile. In every segment, someone mentions Facebook’s mobile might. It’s the most downloaded app, the video intoned. (Actually, it came pre-loaded on my Android.) The real point: Facebook is on top of mobile. It doesn’t even mention that $1 billion purchase Zuckerberg made last month. Instead we see all kinds of people snapping photos in all kinds of settings with their cell phones. Wonder which app they are using. (Hint: Probably starts with ‘Insta’ and ends with ‘gram.’)
- Sheryl Sandberg and David Ebersman. These are the grown-ups in the frat house. Smart, but approachable. No t-shirts. Adult clothes that are more J. Crew than Armani. Again the message: The chief operating officer and chief financial officer are just like you and me. Okay, they’re brainiacs and about to become members of the 0.001%, but they don’t flaunt it. And they mix the emotional message with numbers that prove Facebook is a lovable earnings machine.
- Ben & Jerry. Sprinkles cupcakes. Facebook goes in big for the corporate, but not too corporate, lovefest. The CEO of the hippest ice cream store in the world gives a big heaping scoop of love for Facebook and its ability to connect him with customers. Sandberg reveals that she used the ‘like’ button on her News Feed for Sprinkles, so now she knows about any new exciting flavors coming on board.
- Small business & American Express. This is very shrewd. AmEx Chief Marketing Officer John Hayes appears on the video to describe how the financial giant integrated Facebook in its Small Business Saturday campaign. It racked up 1.5 million fans. Oh, and the eagle-eyed Eric Jackson tweeted that Hayes just happens to be a board nominee for Yahoo, which is suing Facebook over patent infringement. Do we smell a peace pipe here?
- A few numbers. Not too many. All impressive. Just a sampling for you: In the U.S.and Canada, Facebook earns $9.51 per user. Europe, just $4.86. Asia even less, at $1.79; and the rest of the world: $1.42. About half a billion people log on to Facebook daily. Nearly as many have mobile downloads and ads are coming to this cohort. Users upload 300 million photos daily. A total of 3.2 billion likes. Daily. 125 billion friendships. CFO Ebersman dispatches with any worries about growth, which he says won’t always be straight up but, long-term, is basically a no-brainer.
- Zuckerberg’s estimated take from the IPO. Okay. You caught me. It’s not in the video. But PrivCo estimates that if Facebook prices at $35/share, then the 28-year-old Zuckerberg would take home $142 million in cash after selling just less than 10% of his stake. Zuckerberg would then pay Uncle Same $714 million in taxes, and fork over $189 million to the California taxman. He will still have more than 400 million shares for safe keeping, worth an estimated $15 billion-plus. Now those are big numbers.
Nancy Miller is the author of the recently published ebook, The Facebook IPO Primer, Everything you ever wanted to know about about investing in the biggest Internet stock offering ever.