Facebook�s IPO is going to be a huge money-maker for both its employees and venture capital investors — but probably not for its lead investment bank, which likely will be Morgan Stanley (NYSE:MS).
According to a Reuters report, it looks like Morgan Stanley — or other front-runner Goldman Sachs (NYSE:GS) — will take a big cut in its typical fee structure. While fees usually run between 3% to 5% of total capital raised, Facebook’s IPO could run as low as 1%. Though 1% of a possible $10 billion raised still is a cool $100 million.
But the Facebook transaction is about more than just making a nice profit. Snagging the deal could cement an investment bank�s reputation in a red-hot category.
Of course, to date, Morgan Stanley is the head honcho of social deals, with Zynga (NASDAQ:ZNGA), LinkedIn (NYSE:LNKD) and Groupon (NASDAQ:GRPN) among IPOs it can list on its resume. Here�s a closer look at how Morgan Stanley has done in the social IPO space:
| Company | Ticker | Amount Raised | Aftermarket Return |
| Yandex | YNDX | $1.3B | -47% |
| Zynga | ZNGA | $1B | +5.8% |
| Groupon | GRPN | $700M | -23% |
| LNKD | $351M | -18% | |
| Pandora | P | $235M | -20% |
| HomeAway | AWAY | $216M | -32% |
True, these deals haven’t gone perfectly, as seen with the mostly negative returns. But it is not easy to get a sense of company valuations in a new industry. And the extreme market volatility throughout 2011 certainly didn’t help.
Tom Taulli runs the InvestorPlace blog�IPO Playbook, a site dedicated to the hottest news and rumors about initial public offerings. He also is the author of��All About Short Selling��and��All About Commodities.��Follow him on Twitter at�@ttaulli. As of this writing, he did not own a position in any of the aforementioned securities.
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