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Facebook to Bankers: Shut Up About Our IPO Already!

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PRIVATE PRACTICE
DailyFeed
For a company whose entire business model relies on the oversharing tendencies of users, Facebook is a remarkably reticent and publicity-shy company, and it remains so even with an impending multi-billion dollar public offering.
 
As eager investors and tech junkies alike all clamor for news on Facebook’s much-anticipated IPO, the company is telling the Wall Street banks involved in the deal to shut up about it and stop leaking details to the press.
 
Someone somewhere apparently leaked this piece of news to the New York Post, who reported that Facebook founder Mark Zuckerberg has let leading IPO underwriters Morgan Stanley (MS), JP Morgan Chase (JPM) and Goldman Sachs (GS) and other account managers Bank of America (BAC), Barclays Capital (BCS) and Allen & Co. know that besides being unhappy about the IPO leaks, he also wants the banks to cease hyping the offering to their clients.
 
Facebook officials apparently notified the banks via phone and email that the company was none too pleased, for example, that the press managed to find out that Facebook’s S-1 filing would occur on Feb. 1, according to sources of the Post.
 
Also raising the ire of the Zuckster and Co. was the slight competitive tension in the press between Morgan and Goldman in their efforts to land the plum ‘lead left’ role in the most profile IPO since Google’s in 2004, which was contrary to how the company wants to be perceived.
 
“[Facebook] wants to be taken seriously and viewed as a blue-chip company,” one anonymous bank official told the Post.
 
Of course, all bankers involved have internalized the instructions and clamped down on information leaks. No one, of course, wants to be booted out of the prestigious deal, which would mean not only a loss of as much as $500 million in fees but also a severe hit to a bank’s reputation.
 
To be fair to Facebook, it’s hardly the only company who wants privacy during an IPO filing period. In fact, the SEC mandates a “quiet period” at this time in which firms are supposed to avoid advertising or talking to the media until the regulatory agency declares the registration statement effective.
 
Of course, even with the lips of Facebook’s IPO underwriters zipped, there’s still plenty to speculate and scrutinize about the event: When will the social network embark on its IPO roadshow? What figure will it price the stock at? How will this IPO affect the rest of the market? Zuckerberg had better make sure to set his company’s privacy setting to the highest possible level.
 
(See also: Has There Ever Been a Higher Valuated Company With Fewer Employees Than Facebook?, Meet the Newest Facebook Gazillionaires & Facebook Follows Netscape and Google as a Generation-Defining Internet IPO: Should We Care?)
POSITION:  No positions in stocks mentioned.
TICKERS:  NYSE:GS, NYSE:MS   

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