Looking to get in on the frenzy surrounding Facebook IPO? Searching for your golden ticket? Hunting for your piece of this billion-dollar pie?
Well, if you’re asking the question today, you can pretty much forget about it. The little guys (that’s us) won’t be riding the social network IPO cash train.
That’s because, at a target price range of $34-$38 a share, the big wig investment banks that are underwriting the IPO get the first crack. Their high profile (and extremely rich clients) get dibs on the shares.
Next (and last) in line come retail investors. E-Trade, TDAmeritrade and Charles Schwab will have some shares to sell, but even those opportunities are reserved for their top-notch clients, as explained by the LA Times.
Think you might just be top-notch? According to TDAmeritrade’s policies, any client looking to bid on any IPO must have an account worth $250,000 or have made at least 30 trades in the last three months. The average client, however, has an account worth about $67,400 and only makes an average of two trades per month. Charles Schwab customers face similar restrictions.
While E-Trade doesn’t set guidelines like that in writing, it does alert its interested clients they must undergo a “subjective review” of their accounts and trading history. That likely means, in fewer words, that only the biggest and best clients will get a shot (at a minimum order of 50 shares, by the way).
Before you get too bummed out about missing the Facebook gravy train, some financial experts are saying it’s probably a good thing not to buy shares. A Forbes article claims GM’s recent decision to pull advertising from Facebook is just the first indication that the social network is going to suffer in the ad department. Facebook is also facing challenges turning its mobile traffic into dollars — another bad sign. There’s plenty of debate over whether the company has the same potential as, say, Google or Amazon for long-term growth.
If you’re still set on buying shares, it might just take some patience. Facebook has already increased its initial IPO offer by 25 percent after strong demand. There are also companies, such as OneShare and Give A Share, that are poised to offer single shares, primarily for novelty purposes.
And if you don’t emerge as an stockholder of Facebook, at least you don’t have to worry about its lavish spending on employee perks and beautiful work environments, as the Wall Street Journal illustrates in this slideshow.