Facebook is in the final stages of preparing an IPO filing

Facebook is in the final stages of preparing a filing for a much anticipated public offering, sources familiar with matter tell us.

The Wall Street Journal reports that such a filing could come as early as Wednesday and says that Morgan Stanley will take the prestigious role as lead underwriter with Goldman following. We can confirm that Morgan Stanley and Goldman Sachs Group Inc. are slated to underwrite the deal, but can’t confirm the order.

Facebook could be valued at between $75 and $100 billion and is expected to raise around $10 billion in the offering. Larry Yu, a Facebook spokesperson, said the company is “not going participate in IPO-related speculation.”

If Facebook went with Morgan Stanley as the lead underwriter, with Goldman Sachs following, it would mimic the arrangement that Zynga chose in its December public offering. Morgan Stanley could receive up to $220 million in fees for its involvement, according to The Wall Street Journal.

The underwriting arrangement is a surprise considering that Goldman Sachs was supposed to have an advantage on taking the lead spot, given that it organized a $1.5 billion private placement for Facebook last year. Because of Securities and Exchange Commission rules allowing only 500 shareholders for privately held company that doesn’t publicly share financial results, Goldman’s fundraising round attracted media scrutiny. So the investment bank decided to allow only foreign investors to participate in the round.

Earlier this week Bloomberg reported that trading of Facebook shares on secondary markets would be halted for three days. Employees and former employees have also been warned by Facebook’s legal counsel not to talk to the press in the past few weeks, suggesting that a filing may be imminent.

The IPO filing would come at a critical time for Facebook. Private companies with 500 or more investors must legally make their financial records public within 120 days after the end of that calendar year.

Facebook said in January 2011 that it expected to pass the limit and file financial reports no later than April 30 this year. The company does not have to make a public offering at that time, but other companies in a similar position in the past like Google have chosen to go forward with an IPO anyway. Even if Facebook files next Wednesday, it may take several months or more than half a year before the offering depending on broad market conditions and whether company executives manage the SEC “quiet period” well.

For many years, chief executive and co-founder Mark Zuckerberg has said he was not interested in taking the company public because he was focused on the product. Going public could make the company focus more on the short-term expectations of investors and less on the long-run opportunities ahead.

However, as the company’s value has grown, the pressure from employees for an exit has become more intense. In late 2008, Facebook stopped issuing outright equity and instead began to use restricted stock units, which convert to real shares in an event like an initial public offering. What this has meant for employees who have joined after 2008 is that they don’t have an ability to sell their shares in private secondary markets unlike earlier employees.

Zuckerberg has recently changed his tone. In a November interview with Charlie Rose, Zuckerberg said “We’ve made this implicit promise to our investors and to our employees that by compensating them with equity and by giving them equity, that at some point we’re going to make that equity worth something publicly and liquidly, in a liquid way.”