Facebook IPO In Trouble? in [Market-Ticker]

Rich Indians looking to invest in Facebook IPO
Facebook
After signing up in millions to join the social networking site's account, Indians now want a pie of Facebook's coveted IPO as well.
Shailesh Menon, ET Bureau | May 8, 2012, 12.37PM IST

MUMBAI: After signing up in millions to join the social networking site's account, Indians now want a pie of Facebook's coveted IPO as well. Several rich Indian investors, wanting to be a part of the Facebook dream, are readying plans to invest in the $13.5-billion Facebook public issue, the roadshows for which kicked off in the US on Monday.

Though Indian investors may not grab the limelight when the post-issue shareholders' lists are drawn, there may be several Indians who will end up owning a small number of FB shares at issue close. According to international wealth managers, several ultra high-net worth Indians are looking to make "token investments" in the FB issue.

"HNIs in India may subscribe to the Facebook issue in tranches. It'll be more like a token investment in the IPO stage and they will look at increasing exposure after there's a better understanding of earnings growth in the next few quarters," said Prateek Pant, head - products & services, RBS Private Banking India.

Facebook is offering about 337.4 million shares for $28 to $35 each, according to a regulatory filing on Friday. At the upper end of the price band, the IPO would raise $13.5 billion, pegging net valuation of Facebook at $95 billion. The social networking website will launch its issue on May 18 on the US bourses. Facebook added 46 million MAUs (monthly active users) in India as of December 31, 2011, an increase of 132% from the previous year, as per the company SEC filings.

According to wealth managers, rich investors are looking to invest in small lots, mostly for 800 to 1,000 shares. At $35 per share, Indian investors will require over 18 lakh to apply for 1,000 FB shares.

"Indian investors wanting to invest in the FB issue will have to take a measured call. They will have to fund their share purchase through liberalised remittances scheme (LRS) route, which allows every Indian to invest up to $200,000 in overseas asset classes," said Satya Narayan Bansal, chief executive of Barclays Wealth.

"Indians may invest in the FB issue if they find valuations attractive. They may only make token investments as rich investors may not want to exhaust their entire LRS allowance on this issue," Bansal said.

Wealth managers say it's the FB fad that's prompting rich Indians to invest in the issue. A good number of these investors are entrepreneurs and professionals who are familiar with the workings of US stock markets and many of them already have companies like Apple, Google and Microsoft in their portfolios. These investors park their money in global blue-chip companies to diversify their stock portfolios. Their investments in FB is seen more as a fad, wealth managers said.

Indian investors can invest in the FB IPO only if they have an international bank and an overseas trading account. Usually, foreign banks in India refer local clients to their offices (or partners) in Singapore or Dubai to participate in such high profile public issues. Almost all foreign wealth managers are pitching FB to their Indian clients.

The final share allocation will depend on the overall demand for the issue among global investors. Rich investors from China and Gulf countries have already given large mandates to their banks and brokerages to subscribe to the FB issue, wealth managers said.

"Facebook is a breakthrough internet company which has managed to capture the fancy of 900 million users all around the world. Indian investors, however, are apprehensive to commit large sums of money (to the FB issue) simply because several e-commerce companies, which recently floated IPOs at rich valuations, are trading at significant discounts in the US markets," Pant said.

Another worry among Indian investors is the conflicting reports about FB's valuation. Many analysts have voiced concerns over Facebook's 80-85 times price-to-earnings multiple, when an established player like Apple Inc commands a P/E multiple of just over 14 times. According to wealth managers, listing gains is an important factor in US markets, but e-commerce companies like Facebook may need longer holding period for better capital gains. The weak rupee is another factor that's prompting rich Indian investors to put in smaller sums of money to the FB issue.

"Family offices that managed to put out money (overseas markets) when the rupee was at 45-47 levels may consider investing in the FB issue. These investors will not be hurt if rupee gains in strength," said Richa Karpe, director - investments, Altamount Capital, which manages several Indian family offices.

"It is not advisable for investors to convert their LRS allowance at current rates. They may log losses in the event of rupee gaining strength. Price appreciation in FB shares may take time to come," Karpe said.

http://timesofindia.indiatimes.com/busin....

User Info	Facebook IPO In Trouble? in forum [Market-Ticker]
Etz Posts: 13892 Incept: 2007-06-26 LA	It's all peachy according to the spin machine... SAN FRANCISCO (Reuters) - Facebook Inc's record initial public offering is already oversubscribed, a source familiar with the share listing said... http://finance.yahoo.com/news/facebooks-.... ---------- Legal chicanery and beneficent darkness are the banker's stoutest allies - F.Pecora. 2012-05-11 00:35:42 Permalink
Trades50 Posts: 4218 Incept: 2007-10-30 Land of Tax and Spend	Good! Maybe there's realization of Fakebook's business model. ---------- When the people fear the government, there is tyranny. When the government fears the people, there is liberty. - Thomas Jefferson 2012-05-11 00:46:47 Permalink
Jazumah Posts: 208 Incept: 2008-08-20 New York	Even though the Facebook offering is oversubscribed, Bloomberg reports that many on Wall Street are shying away from the offering because they think Zuckerberg is disrespectful. Do you want to give someone billions of dollars when they show up to an investor presentation in a hoodie? I think that some of the wiser investors believe that he isn't prepared to run a billion dollar company. 2012-05-11 01:22:03 Permalink
Mannfm11 Posts: 3556 Incept: 2009-02-28 DFW, Tx	Looks like the public is screaming for the bag. Clearly the guys with the brains don't want to get stuck with this crap. ---------- The only function of economic forecasting is to make astrology look respectable.---John Kenneth Galbraith 2012-05-11 01:31:34 Permalink
Dan721 Posts: 2776 Incept: 2007-08-23 Phoenix, AZ	Jaz, he IS running a billion-dollar company. I'm just not sure I'd want him running MY billion-dollar company. Wait, I have a billion-dollar company? 2012-05-11 04:04:36 Permalink
Jubber Posts: 14174 Incept: 2007-07-05 UK	Grey market dealing 110.5 - 112.5 if you fancy a punt with IG ---------- The problem with socialism is that, sooner or later, you run out of other peoples money. Thatcher 2012-05-11 04:10:31 Permalink
Colk55 Posts: 2428 Incept: 2010-02-11 Indiana	Maybe investors started checking out the NASDAQ from 2000 and noticed the North Korean missile test-like ascent and collapse of Infospace. Maybe they've learned the difference between an IPO and a Hype-PO. If the FB IPO does flop, who can the pumpers rely on for fresh meat to feed to the masses? ---------- The politician's motto: If you can't dazzle them with brilliance, baffle them with bull***. 2012-05-11 04:44:43 Permalink*
Mvj Posts: 2111 Incept: 2007-07-30	Rich Indians looking to invest in Facebook IPO Facebook After signing up in millions to join the social networking site's account, Indians now want a pie of Facebook's coveted IPO as well. Shailesh Menon, ET Bureau \| May 8, 2012, 12.37PM IST MUMBAI: After signing up in millions to join the social networking site's account, Indians now want a pie of Facebook's coveted IPO as well. Several rich Indian investors, wanting to be a part of the Facebook dream, are readying plans to invest in the $13.5-billion Facebook public issue, the roadshows for which kicked off in the US on Monday. Though Indian investors may not grab the limelight when the post-issue shareholders' lists are drawn, there may be several Indians who will end up owning a small number of FB shares at issue close. According to international wealth managers, several ultra high-net worth Indians are looking to make "token investments" in the FB issue. "HNIs in India may subscribe to the Facebook issue in tranches. It'll be more like a token investment in the IPO stage and they will look at increasing exposure after there's a better understanding of earnings growth in the next few quarters," said Prateek Pant, head - products & services, RBS Private Banking India. Facebook is offering about 337.4 million shares for $28 to $35 each, according to a regulatory filing on Friday. At the upper end of the price band, the IPO would raise $13.5 billion, pegging net valuation of Facebook at $95 billion. The social networking website will launch its issue on May 18 on the US bourses. Facebook added 46 million MAUs (monthly active users) in India as of December 31, 2011, an increase of 132% from the previous year, as per the company SEC filings. According to wealth managers, rich investors are looking to invest in small lots, mostly for 800 to 1,000 shares. At $35 per share, Indian investors will require over 18 lakh to apply for 1,000 FB shares. "Indian investors wanting to invest in the FB issue will have to take a measured call. They will have to fund their share purchase through liberalised remittances scheme (LRS) route, which allows every Indian to invest up to $200,000 in overseas asset classes," said Satya Narayan Bansal, chief executive of Barclays Wealth. "Indians may invest in the FB issue if they find valuations attractive. They may only make token investments as rich investors may not want to exhaust their entire LRS allowance on this issue," Bansal said. Wealth managers say it's the FB fad that's prompting rich Indians to invest in the issue. A good number of these investors are entrepreneurs and professionals who are familiar with the workings of US stock markets and many of them already have companies like Apple, Google and Microsoft in their portfolios. These investors park their money in global blue-chip companies to diversify their stock portfolios. Their investments in FB is seen more as a fad, wealth managers said. Indian investors can invest in the FB IPO only if they have an international bank and an overseas trading account. Usually, foreign banks in India refer local clients to their offices (or partners) in Singapore or Dubai to participate in such high profile public issues. Almost all foreign wealth managers are pitching FB to their Indian clients. The final share allocation will depend on the overall demand for the issue among global investors. Rich investors from China and Gulf countries have already given large mandates to their banks and brokerages to subscribe to the FB issue, wealth managers said. "Facebook is a breakthrough internet company which has managed to capture the fancy of 900 million users all around the world. Indian investors, however, are apprehensive to commit large sums of money (to the FB issue) simply because several e-commerce companies, which recently floated IPOs at rich valuations, are trading at significant discounts in the US markets," Pant said. Another worry among Indian investors is the conflicting reports about FB's valuation. Many analysts have voiced concerns over Facebook's 80-85 times price-to-earnings multiple, when an established player like Apple Inc commands a P/E multiple of just over 14 times. According to wealth managers, listing gains is an important factor in US markets, but e-commerce companies like Facebook may need longer holding period for better capital gains. The weak rupee is another factor that's prompting rich Indian investors to put in smaller sums of money to the FB issue. "Family offices that managed to put out money (overseas markets) when the rupee was at 45-47 levels may consider investing in the FB issue. These investors will not be hurt if rupee gains in strength," said Richa Karpe, director - investments, Altamount Capital, which manages several Indian family offices. "It is not advisable for investors to convert their LRS allowance at current rates. They may log losses in the event of rupee gaining strength. Price appreciation in FB shares may take time to come," Karpe said. http://timesofindia.indiatimes.com/busin.... 2012-05-11 06:58:19 Permalink
Goforbroke Posts: 5350 Incept: 2007-11-30 Just call me 'Comrade'	A friend who is normally pretty smart wants to purchase as many shares as he can. "I'm not missing out on another winner. I messed up in not buying Google." I don't even bother to disagree. ---------- We have met the enemy and it is us. -- Pogo 2012-05-11 07:07:59 Permalink
Striker754 Posts: 671 Incept: 2009-07-09	There's conflicting info out there on it. To get in on the IPO allocation or not to get in...certainly they won't let the FB IPO flop the first day eh? 2012-05-11 07:15:49 Permalink
Infidel Posts: 5463 Incept: 2007-08-27 between here and there	"Indians now want a pie of Facebook's coveted IPO as well" Indians don't mind bathing in turd infested rivers either. ---------- "DON'T BELIEVE THEM, DON'T FEAR THEM, DON'T ASK ANYTHING OF THEM." -ALEXANDER SOLZHENITSYN. 2012-05-11 07:19:02 Permalink
Jubber Posts: 14174 Incept: 2007-07-05 UK	111.5 - 113.5 ---------- The problem with socialism is that, sooner or later, you run out of other peoples money. Thatcher 2012-05-11 07:19:29 Permalink
Jstanley01 Posts: 8182 Incept: 2008-07-30 San Antonio, Texas	Mannfm11 wrote.. Looks like the public is screaming for the bag. The public is always screaming for the bag, which is what makes plundering them oh so lucrative. ---------- You can't cheat an honest man. ~P.T. Barnum 2012-05-11 07:52:54 Permalink
Striker754 Posts: 671 Incept: 2009-07-09	As an ancedote, take it how you will, the wait time to get through to TD Ameritrade's IPO department was an hour yesterday. Previous days the call would go right through. 2012-05-11 08:05:55 Permalink
Matt_bear Posts: 6364 Incept: 2008-07-15 a week early on spy puts	yeah, i stopped by the local branch yesterday. 100 callers in que waiting to connect to the IPO department. ---------- In terms of real-world fundamentals, I expect that most of the people around me, whom I work with day to day, and whom I pass on the street ... will be dead within five years. 2012-05-11 10:32:04 Permalink
Djloche Posts: 3280 Incept: 2008-07-07 In the Mountains	so many bag holders, so little time before the goods start stinking ---------- "If we wish to be free, we must fight! I repeat it, sir, we must fight! An appeal to arms and to the God of Hosts is all that is left us! Gentlemen may cry, "Peace! Peace!" -- but there is no peace. The war is actually begun! Our brethren are already in the field! Why stand we here idle?" 2012-05-11 10:43:48 Permalink
Randy123 Posts: 5789 Incept: 2008-09-24 Earth	For those of you thinking of investing in them. http://www.zerohedge.com/news/tax-arbitr.... ---------- China is the Enemy. Wake Up. New Normal. Same As The Old Awful. 2012-05-11 12:33:05 Permalink
Matt_bear Posts: 6364 Incept: 2008-07-15 a week early on spy puts	the comments are ***ing great. ---------- In terms of real-world fundamentals, I expect that most of the people around me, whom I work with day to day, and whom I pass on the street ... will be dead within five years. 2012-05-11 12:40:09 Permalink*
Striker754 Posts: 671 Incept: 2009-07-09	Talks of being oversubscribed and bumping the price range up. Hope not. http://finance.yahoo.com/news/facebook-e.... 2012-05-11 13:18:43 Permalink

Mannfm11 wrote..