Facebook Has Highest Small Investor Demand EverBy: Shawn Hess - May 18, 2012
Just before trading kicked off this morning, CNBC was reporting that Facebook’s IPO has generated the largest small investor interest in history. Now, it’s too early to say how those sentiments are figuring into who actually grabbed a piece of the social networking giant, but if anything they predicted is true, individual investors now own a significant portion of the company.
The portion of the company allotted to retail investors is set somewhere between 20 and 25%. In the days leading up to the IPO, online brokerage firms were overwhelmed with traffic and by Monday of this week, demand had already outweighed available shares. No doubt this was a key factor in Facebook and their underwriters releasing over 50 million more shares by Tuesday.
One thing that I personally found unsettling about the whole affair is how some early investors and Facebook insiders were so willing to give up their own shares and offer them in the IPO. It makes me think they might be banking on them being worth less after the IPO.
Like I said earlier, it is too early to tell at this point, but we’ll be watching the IPO throughout the day and providing more the frequent updates. Check back for more Facebook IPO news soon.