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Sunday, April 8, 2012

Facebook Is Said to Pick Nasdaq for IPO - New York Times

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Facebook Is Said to Pick Nasdaq for IPO - New York Times
Apr 5th 2012, 17:50

Facebook, which is preparing for its highly anticipated initial public offering, has picked a home.

The social network will list its shares under the ticker symbol FB on Nasdaq, according to people with knowledge of the matter, who requested anonymity because the discussions were private.

It is a significant coup for the exchange, which has been embroiled in a battle with the New York Stock Exchange for the darlings of Silicon Valley. While big technology companies, like Apple and Google, have traditionally flocked to Nasdaq, the New York Exchange has aggressively courted the new crop of Internet companies over the last year, grabbing notable offerings like LinkedIn and Pandora Media.

"It's a high-profile win for their listings business," said Michael Adams, an analyst Sandler O'Neill. "In terms of earnings, the impact won't be dramatic, but it's something to be proud of."

Shares of the Nasdaq OMX Group rose 1 percent on Thursday, to close at $25.52. Shares of NYSE Euronext fell about the same to close at $28.31.

For Nasdaq, Facebook is not just any listing.

With more than 800 million users and $3.7 billion in revenue, Facebook has come to dominate the social media industry. The company is widely expected to go public next month and is on track to be the largest offering since Google's debut in 2004. The I.P.O. could value the sprawling social network as high as $100 billion, people familiar with the matter have said, putting it on par with some of the world's largest corporations, like McDonald's and Citigroup.

Based on a possible offering of $5 billion or more, the Facebook listing will be the largest in Nasdaq's history, according to data from S.& P. Capital IQ.

In picking Nasdaq, Facebook had to weigh the differences between the exchanges. Nasdaq is a fully electronic marketplace, while the New York Exchange offers a hybrid model, with a floor-based marketplace and an electronic one. The exchange is widely considered a more global brand, compared with Nasdaq. But its pricing structure is more expensive than Nasdaq's.

Several years ago, Nasdaq was the undisputed leader for technology I.P.O.'s. But its lead has since eroded, amid increasing competition from the exchange, which has spent considerable energy courting the new class of high-flying Internet companies.

Beyond winning LinkedIn, the professional social network, the exchange lured Yelp, the popular reviews site, Renren and Freescale Semiconductor. The exchanges are currently locked in a dead heat for new offerings, with both recording $4.4 billion in I.P.O. volume for the last 12 months, according to data from S.& P. Capital IQ.

Amid a strengthening market for new offerings, Facebook is entering the home stretch of its I.P.O. process. In the last few weeks, the company has curbed trading on secondary exchanges, where its private shares are traded, and pushed ahead on regulatory disclosures.

This week, for instance, the Federal Trade Commission agreed to expedite the approval of a filing for Mark Zuckerberg, the chief executive and founder of Facebook.


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