Facebook: The largest IPO in history?
Nah. In fact, it won't even crack the top 10.
By Jeff Reeves
Ready for the largest IPO in history? Well, you'll have to keep waiting because Facebook won't be it.
Facebook filed documents for its initial public offering of stock as early as Wednesday. According to a report from Bloomberg, Morgan Stanley (MS) has been selected as lead underwriter, a bit of a black eye for Goldman Sachs (GS). The Facebook IPO valuation is fluid, but could push into 12 figures. And most importantly, the initial Facebook stock offering will garner about $5 billion in new funds for the social media company to grow.
You may think the Facebook IPO is all about making investors and staff like CEO Mark Zuckerberg filthy rich. After all, Facebook is a dominant force already with Twitter, LinkedIn (LNKD) and Google's (GOOG) Google+ obvious laggards in reach and revenue from social media operations. But in theory, IPOs are all about raising capital to do business -- despite the fact that there's a lot of cash sloshing around, making multimillionaires overnight.
But believe it or not, Facebook will not be the biggest IPO in history. It actually won't even be in the top 10 worldwide -- and many of the biggest offerings didn't even take place on American exchanges. As for domestic offerings, Facebook is not even in the top three in U.S. history.
Here's the list:
10: Bank of China (BACHY) isn't even listed on a major U.S. exchange, but its 2006 IPO topped $11.2 billion. As the name implies, it's a massive China financial operation.
9: Deutsche Telekom (DTEGF) is another pink sheet powerhouse that offered stock elsewhere and not on major U.S. exchanges. Proceeds from the 1996 IPO topped $12.5 billion at the time. If adjusted for inflation, this IPO would be even higher up the list.
8: Nippon Telegraph and Telephone (NTT) is now offered as an ADR, or American Depositary Receipt, for domestic investors. But at the time of its 1987 IPO, the company wasn't available on the NYSE. Nippon raised $13.7 billion (not adjusting for inflation)
7: Enel (ENLAY) is a former nationalized energy company in Italy, which has never been listed on U.S. exchanges. Proceeds from the 1999 IPO total $16.6 billion.
6: NTT DoCoMo (DCM) is one of Japan's leading providers of mobile and data services. Shares went public in Tokyo back in 1998, raising $18.1 billion (not adjusted for inflation). Shares weren't available as ADRs until years later.
5: Visa (V) finally places an American IPO on the list. The payment processor was the last big IPO before the market for public offerings went into hibernation due to the financial crisis. In 2008, Visa raised $19.7 billion with its IPO.
4: American International Assurance, or AIA, is a major insurance company based in Hong Kong. It once was a division of bailout target American International Group (AIG) but was spun off in part to satisfy debts. The proceeds of the AIA IPO were $20.5 billion in 2010.
3: Industrial and Commercial Bank of China (IDCBY) is another big Chinese financial outfit that doesn't trade on major domestic exchanges. The 2006 IPO of this bank raised $21 billion through simultaneous listings on both the Hong Kong Stock Exchange and Shanghai Stock Exchange to tally the largest IPO in history at the time.
2: Agricultural Bank of China topped this previous IPO, however, in 2010 with the largest IPO in history ... again, at the time anyway. The tally was a total $22.1 billion in proceeds.
1: General Motors (GM) might surprise you as the top IPO in history. The $23.1 billion public offering of GM stock back in 2010 was performed, in part, to pay back the government. At the time, Uncle Sam owned a 61% stake in the automaker. Unfortunately, the feds didn't recoup as much cash as they had hoped. Ultimately, taxpayers lost money on the automaker bailouts despite GM's record-breaking IPO.
Jeff Reeves is the editor of InvestorPlace.com. Write him at firstname.lastname@example.org, follow him on Twitter via @JeffReevesIP and become a fan of InvestorPlace on Facebook. Jeff Reeves holds a position in Alcoa, but no other publicly traded stocks.
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- Why Morgan Stanley is master of the social IPO universe
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