Underwriters Begin Receiving Their Shares Of Facebook IPO Profits

Lead underwriter Morgan Stanley began doling out the $100 million or so in profit earned by banks as a result of Facebook’s initial public offering to the rest of the underwriters, according to reports.

Lead underwriter Morgan Stanley began doling out the $100 million or so in profit earned by banks as a result of Facebook’s initial public offering to the rest of the underwriters, according to reports.

The Wall Street Journal reported that the amount issued to each underwriter was calculated based on their participation in the IPO, adding that the profits were earned through a process known as stabilization, in which underwriters purchase shares at the IPO price in an effort to keep the stock from plummeting below that figure.

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