Dueling Facebook IPO demand stories today:
Bloomberg at 4:53 am: Facebook IPO Said to Get Weaker-Than-Forecast Demand
Reuters at 5:53 am: Facebook’s IPO already oversubscribed: source
Here’s what’s going on.
The Bloomberg story broke and team Facebook (the company and their investment bankers) reacted, choosing Reuters to voice the counter message.
Bloomberg was first and has named sources. Reuters is all “people close to” sources.
Since the company’s in a quiet period, all the positive stuff they and their bankers say has to be off record. But it’s still worth noting that the first story has named sources, the second (reactive) story has none.
Still, you can’t read much into that. The Reuters story (fed by team Facebook) would read the same whether the Bloomberg story was correct or not.
My sources say that the road show is a bit slow and investors don’t like some of what they’re seeing. In particular, the massive move users seem to be making to mobile.
That doesn’t mean Facebook’s IPO is failing. Not even close. But from what I can tell right now the Bloomberg story is correct, and the Reuters story isn’t.
As an aside, I haven’t talked much about IPOs over the years much because, well, there haven’t been many of them.
But as a lawyer I worked on dozens of IPOs and other public offerings in the late 90s, and the games that are played are fantastically entertaining. Deal psychology is very important and monitored closely.
Uncrunched 
Team Facebook should just go ahead and shake with..http://library.thinkquest.org/05aug/00158/images/allseeingeye.jpg
I think this better sums up what’s really going on here: http://2.bp.blogspot.com/-JT_-pBFpSic/T1t7msHm85I/AAAAAAAAC8o/6LqSI1vLEVI/s1600/500x_hoodie.jpg
This would be better – http://www.betabrand.com/executive-pinstripe-hoodie.html
More on deal psychology!
My exact thoughts!!!
Really!? You think the Bloomberg story has cited named sources?? Those are just potential investors commenting on the valuation and whether they would invest or not. None of them is close to the deal to tell whether the deal is going well or not. If that’s what you call a source in journalism, then everyone has sources (i.e., anybody who has an opinion). In the legal field, you would call something like that hearsay. I am not arguing for Facebook or against it, just pointing out that there are no sources in the Bloomberg story either.
“Deal psychology is very important and monitored closely.”
Certainly in initial pricing and first day movement, but is it your experience that there’s a hangover effect after this initial reception? Isn’t the IPO itself ultimately just another milestone in a broader narrative impacting valuation?
So do you think Zuck wearing a hoodie and not giving people the kind of face-time they want etc etc is part of ‘deal psychology’ (perhaps trying to play reverse psychology as in ‘we don’t need you’ so they want them more) or is that just what it appears to be – that he has a Jobsian disdain for Wall Street and investors?
Michael do write about whether you think the IPO will be a success or not? Waiting for your opinion.
Bloomberg has no sources named.
Actually, it can be both. A “weak[ly] demanded” IPO can only be 1x susbcribed or 2x subscribed, if the typical oversubscription is 5x to 10x. If, for example, LNKD was 10x oversubscribed at the IPO and FB is only 3x, it is fair to say both that the demand is “weaker” and than shares are still over-subscribed relative to the number offered.
Now the business world is talking about how much Facebook will be worth when it goes public. To know how Facebool IPO will affect Bay Area property value, come see this article: http://www.movoto.com/blog/market-trends/facebook-ipo-creates-at-least-1-billion-in-bay-area-property-value/
hahah! http://www.youtube.com/watch?v=PzVEK2QcdSw
Just stumbled across this. Holy prescient Batman.