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Insiders say Facebook set to file $5B IPO today

February 1, 2012 — 10:24am ET | By Jason Ankeny

Facebook is poised to file paperwork for a $5 billion initial public offering on Wednesday, sources close to the social networking giant tell International Financing Review. While many analysts expected the preliminary IPO prospectus to scale as high as $10 billion, insiders say Facebook could increase its goal to satisfy investor demand but preferring to go public with a more conservative base. Another source told The New York Times the $5 billion figure is simply a placeholder for determining filing fees, and the final total could differ significantly.

Facebook is expected to name Morgan Stanley as the lead bank for the IPO, putting the firm in the coveted "lead-left" position of the underwriters listing. Morgan Stanley and Goldman Sachs are widely considered the frontrunners for lead bank status: Thomson Reuters data indicates that over the last 12 months, Goldman led 52 IPOs that raised $11.8 billion, while Morgan Stanley spearheaded 66 offerings that raised $10.1 billion. Bank of America, Merrill Lynch, Barclays Capital and JP Morgan round out the initial list of bookrunners, insiders say. Analysts at Freeman & Company estimate that fees for the Facebook offering could be as low as 2.5 percent to 2.8 percent.

International Financing Review adds Facebook's filing timetable indicates the IPO process likely will conclude in May 2012, pending smooth sailing with the U.S. Securities and Exchange Commission.

Recent trading of Facebook stock on private exchanges points to a valuation of more than $80 billion. In the event Facebook opts to increase the size of the filing to $10 billion, the offering would be the largest technology IPO in history, ahead of current record-holder Infineon Technologies (which raised close to $5.9 billion in 2000). Late last year, social gaming firm Zynga--which built its empire on the Facebook platform--raised $1 billion in its IPO, the largest offering by a U.S. tech firm since Google (NASDAQ:GOOG) generated $1.9 billion in 2004.

Facebook now tops 800 million users worldwide, with more than 350 million users accessing the platform via mobile device each month. Nielsen reports that Facebook is the most popular application across all mobile operating systems.

For more:
- read this International Financing Review article
- read this New York Times article