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How to get an early piece of Facebook’s IPO

Marketplace Contributor May 15, 2012

Jeremy Hobson: Shares of Facebook are expected to start trading on Friday, in Silicon Valley’s biggest ever initial public offering. The target price per share was just boosted from at least $28 to at least $34. Most of those initial shares will go to big investors with connections.

But Marketplace’s Bob Moon reports the rest of us do have a chance to get in on the ground floor — albeit a slight one.

Bob Moon: Facebook is taking the unusual step of including online retail brokerage E*Trade to its list of underwriters. That, and offerings from other retail brokerages, will give their customers a shot at getting shares at the issue price, set at $28 to $35.

Even so, Southern California investment advisor Robert Pagliarini is skeptical.

Robert Pagliarini: You can put in a conditional order, saying, “I’d like to buy ‘X’ number of shares.” That doesn’t guarantee that you’re going to get those shares — it’s a conditional order.

Brokers have posted terms to qualify for Facebook’s IPO shares. E*Trade requires a 50-share minimum. Fidelity customers need $500,000 in brokerage-account assets, and at least 36 trades in the last year.

What’s a Facebook fan to do? Joe Magyer is senior analyst at the Motley Fool investors’ website.

Joe Magyer: You could go ahead and, you know, express to your broker that you’d like to try and get shares. Odds are that you probably won’t get them.

Not to worry, says Pagliarini. Investors could learn a lesson from Google’s IPO.

Pagliarini: I mean there was a lot, plenty of opportunity to buy into Google after the IPO, and after the “pop” of Google, and so you don’t have to be in on Day One.

In fact, he says, investors might even be better off waiting out the euphoria.

I’m Bob Moon for Marketplace.

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