Reporting Murray Feldman
SOUTHFIELD, Mich. (WWJ) – This could cause a lot of interest in the stock market. Facebook could file regulatory papers this week for its initial public stock offering.
The popular social networking site is expected to file papers with security regulators on Wednesday. WWJ & Fox 2 Business Editor Murray Feldman says they’ll tell which firms will actually put up the money to take the stock to the NASDAQ or the New York Stock Exchange . He says those firms make their money when the stock goes public, then they’re out of it. Where do you come in?
“You’re at the end of the line,” Feldman said. “Usually, the very first shares — as we remember with General Motors — go to the big mutual funds and the big business clients of the financial firms that take the stock to market. They give them first dibs on the stock. They’ll be able to buy it at a set price and a set number of shares when it goes public. Then it starts to trade on the open market.”
But, Feldman cautions that when General Motors went public, it opened at $33.00 a share and went down. It’s now trading at $24.00 a share. Feldman says a Facebook-like company, LinkedIn, opened at $45.00 a share, went up to $94.00, and is now trading around $76.00 a share.