Facbook IPO: Demand Not What It Seems
Ahead of Facbeook's (Nasdaq: FB) initial public offering, an IPO viewed by many as the most anticipated out of Silicon Valley since Google's (Nasdaq: GOOG) in 2004, demand for the social media giant's shares may not be as robust as some might expect.
Amid decelerating growth and concerns about the company's potentially lofty valuation, demand for Facebook's IPO has been weak on the institutional, Bloomberg reported last week.
Tepid institutional interest has put California-based Facebook in the position of expecting retail investors to pick up the slack left by mutual funds and other institutions, but that may not be happening to the degree that Facebook needs to make its IPO a success.
A soaring valuation may be the culprit keeping retail investors at bay regarding the IPO. Benzinga users have said they are receiving calls from brokers at Merrill Lynch, a unit of Bank of America (NYSE: BAC), Morgan Stanley (NYSE: MS) and J.P. Morgan Chase (NYSE: JPM) to see if they would be interested in some Facebook stock. These are retail investors, not institutions. we're talking about.
Confirming the notion that demand for Facebook shares is not as robust as many had previously speculated, Reuters reported that Merrill Lynch brokers received more shares than expected and those brokers along with their counterparts from Morgan Stanley are looking to move Facebook shares before 3PM Eastern time today.
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