Will retail investors get to taste Facebook’s stock as it comes out in the summers?

In the 24 hours or so since Facebook filed its long-awaited S-1 and started on the way to a second-quarter public offering, some of the focus has been on the near-certainty that the bulk of the social network’s shares being sold will be snatched up by big institutions and high net-worth individuals. There are some signals though, that retail investors will not be shut out of the offering entirely.

TD Ameritrade now believes its clients will be able to participate in the Facebook IPO, according to a spokesperson, though it warns that the extent of that participation has yet to be determined. Clarity on that front may not come anytime soon either, given that Facebook is only one day into an IPO process that took fellow social media firms LinkedIn, Groupon and Zynga between three and six months.

An E-Trade Financial spokesman could not yet say if the firm expects to offer Facebook IPO shares to clients, while a Charles Schwab representative did not immediately respond to a request for comment.

While many IPOs pass by unnoticed by most of the public, Facebook is a business intertwined with everyday life and many of its users will likely want an opportunity to purchase shares in a business they have helped grow. Some observers have bemoaned the fact that retail investors will be relegated to buying after the opening pop once shares begin trading, by which point the company’s valuation is likely to be at dizzying levels.

Google‘s high-profile IPO in 2004, which encouraged retail participation with a Dutch auction that avoided traditional underwriters but was tweaked for leaving money on the table, had been suggested by many as a potential model for the social network, which is aiming to raise at least $5 billion according to Wednesday’s filing. Instead, Facebook enlisted lead underwriter Morgan Stanley, along with JPMorgan Chase, Goldman Sachs Group and others, to pitch its shares to clients.

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Posted by Usman Khalid on Feb 3 2012. Filed under Business. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.