Facebook’s video for retail investors in its forthcoming initial public offering is a nice innovation, but fundamentally, Facebook is taking a step back from Google’s IPO in 2004.
The IPO bookrunners and co-managers are a litany of Wall Street names, led by Morgan Stanley, JP Morgan and Goldman Sachs. But Facebook has dropped Google’s attempt to upend the IPO process by running an electronic auction.
The biggest uncertainty is how much of a role Mark Zuckerberg, Facebook’s founder and controlling shareholder, will play in marketing the new stock. But regardless of that, his company is taking a distinctly traditional approach.
This is a shame, given the amount of effort Google, under the influence of Hambrecht & Quist, put into making its IPO more open and networked with an auction process. That was an attempt to give IPOs a Silicon Valley twist.
The most recent Silicon Valley IPOs, however, have been traditional to a fault. Not only have they stuck to Wall Street underwriting as the means of pricing the stock, but they have largely opted for dual class share structures (as did Google).
Whatever the tensions between Silicon Valley and Wall Street, it seems as if the pair have reached a comfortable accommodation.
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