Facebook Inc. (FB:US) will meet with its underwriters in New York tomorrow to discuss the social- networking service’s planned initial public offering, according to two people with knowledge of the matter.
Facebook will hold a so-called teach-in at each of its main banks, starting with Morgan Stanley and then moving on to JPMorgan Chase & Co. (JPM:US) and Goldman Sachs Group Inc. (GS:US), said one of the people, who declined to be identified because the plan is private. Executives will use the sessions to go over Facebook’s growth prospects (FB:US) and other talking points for its IPO road show, the person said.
Facebook plans to hold meetings with investors on May 7 in New York, May 8 in Boston and May 11 in Palo Alto, California, according to a road show schedule.
Spokesmen for the underwriters declined to comment. Jonathan Thaw, a spokesman for Facebook, didn’t immediately respond to a request for comment.
Facebook has hired 33 banks to manage the IPO, including Morgan Stanley (MS:US) as the lead underwriter. In its initial filing (FA:US) on Feb. 1, Facebook named Morgan Stanley, JPMorgan, Goldman Sachs, Bank of America Corp. (BAC:US), Barclays Plc and Allen & Co. to handle the deal and later added more banks.
The Menlo Park, California-based company is seeking to raise as much as $11.8 billion in its offering, scheduled to price May 17. The company plans to pay underwriters a 1.1 percent fee, two people with knowledge of the company’s plans said in March. Based on that percentage, underwriters would share about $130 million assuming Facebook sells stock at the top end of its proposed price range. The lead bank typically earns a bigger cut of the total.
At 1.1 percent, Facebook would be paying its banks about one-fifth the typical rate for U.S. IPOs, according to data compiled by Bloomberg. With larger IPOs, banks can often afford to take a smaller percentage fee, and high-profile offerings such as Facebook can lead to future business, making securities firms willing to accept less. Facebook won’t disclose the fees for its bankers until the IPO is completed.
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