California State University, Fullerton
FIN 321
Few IPOs have garnered as much attention as social media giant Facebook’s public offering on May 18, 2012. It was the biggest IPO in internet history, easily topping Google’s IPO eight years earlier. Let’s take a closer look at the IPO itself, as well as the payoffs to some of Facebook’s early investors. 1. Begin by navigatin
...[Show More]
California State University, Fullerton
FIN 321
Few IPOs have garnered as much attention as social media giant Facebook’s public offering on May 18, 2012. It was the biggest IPO in internet history, easily topping Google’s IPO eight years earlier. Let’s take a closer look at the IPO itself, as well as the payoffs to some of Facebook’s early investors. 1. Begin by navigating to the SEC EDGAR Web site, which provides access to company filings: http://www.sec.gov/edgar.shtml. Choose “Company Filings Search” and pick search by “Company Name”. Enter “Facebook” and then search for its IPO prospectus, which was filed on the date of the IPO (May 18, 2012) and is listed as filing “424B4” (this acronym derives from the rule number requiring the firm to file a prospectus, Rule 424(b)(4)). From the prospectus, calculate the following information: 1. The underwriting spread in percentage terms. How does this spread compare to a typical IPO? The underwriter spread in percentage form is 1.1%=($0.418/$38)x100. Compared to typical IPOs, Facebook is currently lower. b. What is the fraction of the offering that comprised primary shares and the fraction that comprised secondary shares? How much money did the company raise through the IPO? How much money did the existing shareholders get from the IPO? And how much did the underwriters profit? Primary
[Show Less]
-preview.jpeg)
