Everybody wanted in on the Facebook IPO. Every investment bank wanted a piece of the underwriting action. It was going to be the biggest IPO ever. It was going to lead to more business and huge profits – more exposure and attention for the investment bank that took the social network public.
Yeah, that was all a dream. In the end it turned into a nightmare for the lead underwriter, Morgan Stanley. They’ve received nothing but negative attention and bad press which now may lead to investigations in how they ran the IPO.
So who was wise and smart about the Facebook IPO. Well, Goldman Sachs of course. They got in on the IPO by actually buying shares years before the company went public and then selling those share when it did. Goldman wins again.
Goldman Sachs Group Inc. and funds managed by the firm raised $1.09 billion selling stock in Facebook Inc.’s initial public offering, cashing out almost half their stake in the social network.
The investment bank and its funds offered 28.7 million of the 65.9 million shares they own at $38 apiece, the top of the price range. Goldman Sachs sold 6.18 million of its own holdings, raising $235 million. The number of shares being offered by Goldman Sachs was included in a filing yesterday by Menlo Park, California-based Facebook.
The investment gain helps validate Goldman Sachs Chief Executive Officer Lloyd C. Blankfein’s business model and a January 2011 transaction that threatened to undermine efforts to improve his New York-based company’s reputation after it settled fraud claims a year earlier. U.S. regulators are drafting rules to prevent banks that receive federal backing from making risky bets with their own money. (SF Gate)