Facebook has submited paperwork to regulators for a $5 billion initial public offering and has selected Morgan Stanley and four other bookrunners to handle the mega-IPO.
The company founded by Mark Zuckerberg in a Harvard dorm room in 2004 picked Morgan Stanley to take the coveted "lead left" role in what is expected to be the largest IPO ever to emerge from Silicon Valley.
The $5 billion is a preliminary target and could be ramped up in coming months in response to investor demand. It said in its preliminary filing that its net income rose 65 per cent to $1 billion in 2011, off revenue of $3.71 billion.
The long-awaited submission kicks off a months-long process that will culminate in Silicon Valley's biggest coming-out party since the heyday of the dotcom boom and bust.
The other four bookrunners chosen were Goldman Sachs, Bank of America Merrill Lynch, Barclays Capital and JP Morgan, although the underwriting syndicate could be expanded later.
Facebook declined to comment on the report. "Lead left" refers to where the top underwriter's name will appear on the IPO prospectus.
Getting picked for the IPO is a coup for Morgan Stanley and Michael Grimes, the global co-head of the bank's technology investment banking unit. The securities firm won the biggest share of business underwriting US initial offers by internet companies last year, data compiled by Bloomberg show. Taking the lead on Facebook may catapult the New York-based bank to the top of the US IPO league table for a third year running.
The preliminary IPO filing sets the stage for a May market of the world's largest social network, a coming-out party that will dwarf almost any before that, including Google's $2 billion IPO.
The prospective IPO - expected to be one of the largest US market debuts in history - has whipped up a frenzy of investor and media speculation this month, buoying shares in social media peers from RenRen to LinkedIn and igniting fierce competition on Wall Street.
The IPO likely set a new standard for how low its arrangers are willing to go on advisory fees to win big business, analysts say.
Facebook had previously been expected to raise $10 billion in what would have been the fourth-largest IPO in U.S. history, after Visa Inc, General Motors, and AT&T Wireless, according to Thomson Reuters data.
Silicon Valley start-ups from Zynga and LinkedIn to Groupon and Pandora Media have since last year begun testing investor appetite for a new wave of dotcoms, with mixed results.
Investors last year had warned of a second dotcom bubble inflating, after LinkedIn doubled on its debut; but the so-called over-enthusiasm has waned in recent months.
The last dotcom player to debut, Zynga, closed 5 per cent below its IPO price during its first trading day in December.
Agencies
