IPO | Bankers Prioritize Status Over Money in The Facebook IPO

 According to people familiar with the proposed IPO, the biggest online social network is anticipated to raise $10 billion from the public markets in the near future, valuing the company at up to $100 billion.

One of the largest U.S. market debuts ever will take place, making it a desirable accomplishment for investment bankers vying for lead advisory positions.

According to bankers MSME IPO and business experts, there is currently fierce competition on Wall Street, particularly between Goldman Sachs Group Inc. and Morgan Stanley, which is widely considered to be the front-runner and may offer its underwriting services for as little as 1% of the entire proceeds.

That would be significantly less than the standard price of 7% for smaller contracts or the typical fee of 2% to 3% for larger contracts.

According to James Montgomery, CEO of the San Francisco-based investment bank Montgomery & Co., the Facebook initial public offering is historic.

Facebook may simply agree to a 1 percent commission for each investment bank that sells its shares.

Except for the sales of bailed-out companies like General Motors Co., American International Group Inc., and Ally Financial Inc., which sold shares held by the U.S. government in the wake of the Startup Funding financial crisis, such a low cost is practically unheard of for investment banking transactions.