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article imageZuckerberg warns bankers to stop leaking info to press

By Leigh Goessl     Feb 7, 2012 in Business
Palo Alto - Reportedly Facebook CEO Mark Zuckerberg is warning bankers involved with the social network's IPO to keep information to themselves.
According to the New York Post, Zuckerberg has told Morgan Stanley, JPMorgan Chase, Goldman Sachs and other banks with a role in the company's IPO deal to stop leaking information to the media. Purportedly Zuckerberg has also warned bankers to stop talking up the stock to potential investors.
Facebook has entered its 'quiet period', which is a time period required by the U.S. Security and Exchange Commission (SEC) for companies to not release any information as the S-1 paperwork is being reviewed prior to the initial public offering.
Reportedly, Zuckerberg and company sent the messages via phone calls and emails, the Post's sources said. The Post also said that banks have "reacted by warning employees not to discuss the filing."
If not, the banks run the risk of being dropped from the IPO deal which can ruin the chances of being involved in what is predicted to be the largest IPO with a potential $100 billion valuation. A successful deal with Facebook can also lead to other potential IPO clients in the future. Currently tech and social-related IPOs are en vogue and its possible some good future business opportunities may come along for those who get in on the ground floor of a highly visible deal.
“[Facebook] wants to be taken seriously and viewed as a blue-chip company,” the Post reported one bank official, familiar with the listing, but not authorized to speak publicly.
A 'blue chip' company is one that is well-recognized and financially sound, including successful longevity in terms of profitability. For investors, blue chip companies are less volatile investments.
Facebook is also a company that has strategically dealt its hand close and kept its cards secret in its journey to the top of its market.
Zuckerberg indicated in his S-1 letter Facebook was not built to be a company, but the reality is that it has become a company, and a big one at that. One that many bankers, investors and potential investors are eagerly watching.
In lieu of his warnings to banks, it seems Facebook's CEO is not about to allow Facebook to become a flash in the pan type of investment option. Reportedly the emails did not contain any threats, but if banks are now going mum, Zuckerberg's message was presumably received.
More about Facebook, Mark Zuckerberg, Ipo, Bankers, Press
 
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