'Fast Money' Recap: Mining Facebook's IPO Filing

NEW YORK ( TheStreet) -- The trading panel devoted their attention CNBC's "Fast Money" show on Wednesday to details of Facebook's $5 billion IPO filing.

According to the S-1 filing, Facebook, which will have "FB" as its stock symbol, will start trading sometime in the second quarter at a still undisclosed exchange. Morgan Stanley is the lead underwriter of the offering.

Facebook disclosed in the filing that it had $3.8 billion in revenue, $668 million in net income and 845 million monthly active users worldwide in 2011.

Karen Finerman was amazed at Facebook's revenue growth, which grew 88% from 2010 to 2011. "We will see multiples that we haven't seen since the Internet craze," she said.

Pete Najarian said everyone will want a piece of the stock, regardless of the price. He said he was having problems translating Facebook's $85 billion valuation into ad sales, app sales and revenue.

For a breakout of some stocks from a recent "Fast Money" TV show, check out Dan Fitzpatrick's "3 Stocks I Saw on TV."

3 Stocks I Saw on TV

Michael Murphy was skeptical of the buzz, saying Facebook is priced for perfection and being lumped in such established tech heavweights like Apple ( AAPL) and Google ( GOOG).

Guy Adami acknowledged the lofty valuation but said that won't prevent the stock from going higher.

Finerman said her firm had turned down an offer to buy some shares in Facebook when it had a $60 billion valuation. Najarian said he would jump at any chance of an allocation of the stock so long as he could flip it. He said he doesn't have any information on what the IPO holding period will be.

Melissa Lee, the moderator of the show, and other reporters rattled off details of the filing. She said Zynga ( ZNGA) accounted for 12% of Facebook's revenue.

CNBC reporter Kayla Tausche, who was sifting through the 201-page filing, noted 83% of Facebook's revenue came from ad spending.

Julia Boorstin, another CNBC reporter, said Facebook had a gross margin of 47% in 2011. She also noted that CEO Mark Zuckerberg said in his letter to employees and shareholders that Facebook's mission was to make money to build better services, with the goal of building an open, connected Web.

Lee brought in Kevin Landis, CIO of Firsthand Technology Funds, who said Facebook accounts for 5% of its portfolio. He said he hopes to increase his position.

Landis said investors need to go beyond the number crunching from Facebook's filing and look at what it is becoming. He said Facebook has more members than any other site, visitors linger longer and Facebook knows more about them.

CNBC tech reporter Jon Fortt noted that Zuckerberg will maintain voting control of the company, with that control passing upon his death to a designated successor. On the revenue side, Fortt said Facebook saw both an increase in the number of ads and pricing for ads. He also noted Facebook's lease obligations were considerable.

Tausche said Facebook said in its filing that it will continue to evaluate whether to enter China. He said Facebook hasn't come up with a mutually agreeable approach to the legal and regulatory complexities operate in that huge market.

According to Tausche, mobile products and increase mobile usage are key company priorities. She also said Facebook doesn't forsee paying a dividend in foreseeable future.

Tausche noted the fair value of common class B stock was $29.73 . She said there's a provision in the filing that allows Zuckerberg to buy 120 million shares at 6 cents a share and his father to get 2 million shares.

One person who recently sold off Facebook shares was Michael Roth, chairman and CEO of Interpublic Group. He said his firm invested $5 million in Facebook in 2006 and sold half of the stake in August for $133 millon.

Roth said they had invested in the company as a strategic opportunity to learn more about Facebook for its clients.

Boorstin said in addition to the ad revenue, Facebook sees additional opportunities in the payments business, an area in which it saw revenues increase five times between 2010 and 2011 in the virtual gaming area. She said Facebook is considering expanding the payments business into other areas such shared retail shopping experiences.

Lee noted the SEC's Website had crashed because of the large numbers of people wanting to read the filing. Pot, ashland, gpn, huntsman.

In the final trades, Murphy liked Potash ( POT). Adami liked Ashland ( ASH). Finerman favored Global Payments ( GPN), and Najarian liked Huntsman ( HUN).

-- Written by David Tong in San Francisco.

>To contact the writer of this article, click here: David Tong.

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