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Faceook: Mum's the Word

February 6, 2012
[ by Melanie Gretchen ] Facebook's Mark Zuckerberg told underwriters in his company's multi-billion dollar IPO to stop their current behavior, which has displeased Facebook officials.  That would include leaking information to the press, sniping at other firms, talking up the stock offering to clients via e-mails and phone calls. Zuckerberg specifically referred to leaks about Facebook's 2/1/12 filing with the SEC, and boasting by Morgan Stanley for winning the lead underwriting role over rival Goldman Sachs. Fear of Being Dropped by Facebook. Although Facebook issued no threats,  firms have heeded the warning.  They saw what happened to UBS, which was dropped from the General Motors IPO underwriting syndicate in November 2010.  In this case, banking firms could lose not only the $40 million in deal fees, but also the prospect of future tech offerings - conducted by Facebook and other tech start-ups. So-called quiet period. Having filed the S-1 registration statement with the SEC, Facebook and its team of underwriters are in a so-called quiet period.  In the coming weeks, the underwriters will meet with Facebook - Zuckerberg, CFO David Ebersman, and COO Sheryl Sandberg - to reach the most appropriate valuation for the Menlo Park, CA, company.  Underwriters will be looking to offer the social media giant’s shares at a level that deep-pocketed institutional investors can wrap their head and their wallets around. If valued at $100 billion, that would mean the company would be worth 100 times its 2011 profits of $1 billion - not a quiet figure. [NY Post, 2/5/12]