FACEbook IPO

SUGGESTED STUDENT ASSIGNMENT

1. How does Facebook make money? What are the value drivers of its business? What is its
comparative advantage relative to other social networking companies?
2. Why is Facebook going public? What is the planned use of proceeds from the offering?

4. What is the intrinsic value of a Facebook share? How does this valuation compare to the
price talk from the underwriters?
5. As a potential shareholder, what are your concerns about Facebook or its stock offering?
6. What is your recommendation for the CXTechnology Fund?

YOUTUBE VIDEOS ON FACEBOOK IPO

Facebook’s IPO roadshow video (30 minutes)

Newsy Business: Zuckerberg Kicks Off Facebook IPO Road Show (2:39 minutes)

http://www.youtube.com/watch?v=VcoKUcIE8cM&feature=related

University of Florida: Dr. Jay Ritter on Facebook IPO (5:01 minutes)

http://www.youtube.com/watch?v=zAvPnHEf9-I

•  Size of IPO/how much is being sold: 0:28 to 1:26

•  Ripple effects on IPO market: 1:27 to 1.48
•  V aluation: 1:49 to 2:32
•  Compared to Google: 2:33 to 3:31
•  Is value justified?: 3:31 to 4:01
•  Effect on economy (especially Silicon Valley real estate): 4:01 to 5:01

CNBC Interview with Morgan Stanley (MS) CEO James Gorman on May 31, 2012 (15:48 minutes)
http://www.youtube.com/watch?v=3TuwVpsYwDE

•  Intro/Price reaction/Gorman explanation: 0:00 to 4:54

•  Will MS reimburse investors that lost money?: 4:55 to 5:20
•  Explains pricing and retail allocation: 5:20 to 8:35
•  The greenshoe: 8:35 to 9:32
•  Why raise the number of shares?: 9:32 to 10:20
•  Amendment to prospectus and SEC investigation: 10:20 to 14:18
•  Question about MS (unrelated to Facebook): 14:18 to 15:00
•  Will this hurt further tech IPOs?: 15:00 to 15:48