Facebook’s $5 billion IPO is big news for investors, users and Mark Zuckerberg haters. But it is also big news for the banks vying for a piece of the pie – especially since this offering is set to be the biggest Internet IPO to date.
Morgan Stanley, J.P. Morgan and Goldman Sachs share lead roles in the IPO, while Bank of America Merrill Lynch, Barclays and Allen & Co. are also serving as underwriters.
For Morgan Stanley, which won the biggest share in the offering, the deal signals the bank is likely to become the top public offering underwriter in the United States, according to Bloomberg. The bank has recently worked on mega IPOs by Internet giant Zygna.
This is a position J.P. Morgan apparently coveted in the worst way, as Reuters chronicled the bank's months of schmoozing with Facebook executives in order to win a leading role in IPO. The news service wrote:
Both (CEO Jamie) Dimon and (veteran rainmaker Jimmy) Lee saw Facebook as one of the next "Blue Chips," and J.P. Morgan stepped in early to build a commercial relationship, including spending millions of dollars to help Facebook build a data center, the source said.
Goldman lost the lead role in Facebook IPO, signaling a turnaround for the bank. Last year, the bank made headlines after scuttling a private sale of the company’s stock to investors last year.
Citi plans to stop using brokers to originate mortgages and will probably cut jobs. [Businessweek]
HSBC will close its fund-administration business in the U.S. and shift it to Ireland. [WSJ]
State Street and J.P. Morgan are leading bidders in the sale of Deutsche’s asset management business. [Financial Times]
Jefferies gave employees a choice when paying the stock-based portion of their annual bonuses: accept the firm’s shares, or take cash at a 25 percent discount. [Businessweek]
Glencore has approached the mining company Xstrata about a takeover deal that would create an $80 billion company. [DealBook]
Allstate’s Q4 profit more than doubled on lower catastrophe costs. [Bloomberg]
Deutsche’s Q4 profit plunged 76 percent on a revenue drop on the European sovereign debt crisis. [NY Times]
Blackstone posted a wider quarterly loss and revenue slumped despite higher fee-earning assets under management. [WSJ]
In a survey of 173 advisers who went independent in the past five years, 76 percent said they are better off financially because of the move. [Investment News]
KPMG is buying a tax-compliance business specializing in "indirect taxes" from Thomson Reuters. [WSJ]
London private equity firm Duke Street abandoned its efforts to raise a $1.1 billion fund after facing weak investor demand. [Financial Times]
A former global head of macro trading at Barclays in London is starting Atreaus Capital in New York. [Businessweek]
Credit Suisse’s former global head of structured credit trading Kareem Serageldin was charged in a scheme boost bonuses. [Bloomberg]