The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.
By Tom Taulli, InvestorPlace Writer
NEW YORK (
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
(MS - Get Report).
Value of Social Stocks at $33 Billion
According to a
report, it looks like Morgan Stanley -- or other front-runner
(GS - Get Report)
-- 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.
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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
among IPOs it can list on its resume. Here's a closer look at how Morgan Stanley has done in the social IPO space:
Video: Shatner's Last Hurrah With Priceline
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
, a site dedicated to the hottest news and rumors about initial public offerings. He is also the author of
All About Short Selling
All About Commodities.
." Follow him on Twitter at
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Largest IPO in history? Facebook won't crack the top 10
Expect a busy week for IPOs