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BREAKING NEWS FROM CNBC’S KATE KELLY: RETAIL DEMAND FOR FACEBOOK WAS HIGHEST EVER FOR IPO

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KATE KELLY: THANKS SO MUCH MELISSA. SO I HAVE DONE A BUNCH OF REPORTING IN THE AFTERMATH OF THE $38 SHARE PRICE DECISION AND ONE KEY QUESTION CERTAINLY FOR OUR VIEWERS AS WELL AS INVESTORS AROUND THE COUNTRY AND THE WORLD IS WHAT WOULD THE RETAIL SLICE OF THIS OFFERING BE. FIRST OF ALL I UNDERSTAND RETAIL DEMAND FOR THE FACEBOOK IPO IS THE HIGHEST THAT BANKERS AND INVESTORS HAVE EVER SEEN OR HEARD OF FOR A COMPANY ABOUT TO HAVE A NEW ISSUE. THIS PROBABLY ISN’T A HUGE SURPRISE BUT IT IS A FACT BUT GM WAS THE LARGEST RETAIL ALLOCATION IPO THAT WE KNOW OF UNTIL NOW THAT OF COURSE WAS THE FALL OF 2010 AND THE RETAIL SLICE OF THAT DEAL WAS CLOSE TO 20% I AM TOLD BY PEOPLE THAT WERE INVOLVED AT THE TIME. FACEBOOK THE SLICE THAT WILL GO TO SMALL INVESTORS IN THIS CASE IS STILL BEING COMPLETED. AS OF LATE LAST NIGHT I WAS HEARING THAT WOULD BE ANYWHERE FROM ABOUT 15% TO THE LOW 20s PERCENT THAT 25% MIGHT BE A LITTLE HARD TO PULL OFF JUST BECAUSE THERE WAS SO MUCH INSTITUTIONAL INVESTOR INTEREST AND THEY ARE TRYING TO BUILD SORT OF A LONG TERM BOOK BUT AT THE SAME TIME THIS MORNING WE ARE HEARING THAT THE NEEDLE IS MOVING CLOSER TO 25% SO I WILL KEEP YOU POSTED AS THAT UNFOLDS BUT THAT’S A VERY INTERESTING ELEMENT.

THE OTHER THING THAT I WANTED TO POINT OUT IS THAT THE $38 PRICE WAS OBVIOUSLY MUCH ANTICIPATED YESTERDAY WE WERE ALL WAITING FOR THAT FINAL NUMBER AND I AM TOLD THAT THE BANKERS AND THE COMPANY WERE THINKING ABOUT THAT NUMBER ALL DAY LONG THAT FROM 9AM THEY WERE THINKING ABOUT $38 THEY DID POLL SOME INVESTORS ABOUT HOW THEY FELT ABOUT $39 OF COURSE THEY TALKED TO INVESTORS ABOUT $40 OR EVEN HIGHER AND THERE WAS SOME CONVICTION AMONG PEOPLE INVOLVED WITH THE DEAL THAT THE STOCK COULD DO ABSOLUTELY WELL NORTH OF $40 I KNOW JIM CRAMER THOUGHT SO I KNOW A LOT OF PEOPLE THOUGHT SO HOWEVER DAVID EBERSMAN WHO YOU GUYS HAVE BEEN TALKING ABOUT THIS MORNING THE KING OF THE ROADSHOW THE CFO OF THE COMPANY AN EXPERIENCED GUY IN HIS OWN RIGHT HE REALLY DROVE THE BUS ON THIS AND HE FELT THAT $38 DOLLARS DAVID WAS KIND OF THE PRUDENT MARK. HE KNEW THAT THEY WOULD HAVE TO SELL STOCK DOWN THE ROAD HE DIDN’T WANT PEOPLE TO FEEL THAT THEY WERE BEING GREEDY

DAVID FABER: THE DYNAMIC THAT YOU ARE DESCRIBING WITH 25% AS MUCH AS THAT GOING TO RETAIL AND JIM CRAMER DESCRIBING EARLIER HOW THAT COMES OVER THE TRANSOM AND HOW THEY ARE GOING TO GET TO A PRICE. ARE YOU GETTING ANY SENSE FROM THE UNDERWRITERS SORT OF HOW THEY ARE MANAGING THAT VERY SIGNIFICANT DYNAMIC AND DEMAND THAT YOU JUST DESCRIBED?

KATE KELLY: YOU KNOW I THINK THAT IT HAS BEEN VERY DIFFICULT FRANKLY I MEAN I THINK THIS WAS SORT OF AN ALL NIGHTER FOR THE KEY BANKERS ON THE DEAL AND THIS QUESTION WAS VERY MUCH IN FLUX AS WELL AS WITH THE INSTITUTIONAL INVESTORS I MEAN THE MESSAGE I WAS HEARING WAS THAT EVERYONE IS GOING TO BE DISSAPOINTED THE ALLOCATIONS THAT EVEN VERY EXPERIENCED SORT OF FAVORED INVESTORS ARE GOING TO GET IS GOING TO BE SMALL SOME PEOPLE ARE GOING TO GET NOTHING SO I THINK THE RETAIL NEEDLE CONTINUES TO MOVE AND I SHOULD ADD THAT IT IS NOT SOMETHING THAT IS EVER REALLY PUBLICLY DISCLOSED IT IS SOMETHING WE HAVE TO REPORT ON I WILL BRING UPDATES TO YOU GUYS AS I GET THEM.

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