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Tuesday, May 15, 2012
CORTEZ JOURNAL
Facebook IPO shares tough Grace’s kitchen needs cook’s helper task for small investors briefs
By DAVE CARPENTER
AP Personal Finance Writer CHICAGO — Hoping to get in on Facebook’s hotly anticipated public stock offering? You’ll need Facebook friends at very high levels — or a lot of money. Most people who like the idea of owning Facebook’s stock will have difficulty getting it at the offer price, currently expected at $28 to $35 a share. Unless you know the right people at Facebook, you’ll likely need to have a large, active account with one of the big banks or brokerage firms directly involved in the stock sale. Otherwise, you can take your chances by buying shares after the initial public offering is completed, when Facebook begins trading on the Nasdaq Stock Market under the ticker symbol “FB.” That’s likely to happen Friday. Doing it that way typically means paying much more for the stock, however. And heavy demand skews the early stock price, leaving an investor vulnerable to the risk of a big drop. Jerome Cleary isn’t deterred. One of a legion of Facebook fans, he has never wanted to own a stock as much as he wants to buy this one. Cleary, a standup comedian in Los Angeles, says he has already signed up for an account with a discount
online brokerage so he’ll be ready. “I know you should buy stock in what you know and like,” Cleary says. “I feel that because they have an incredible mass of wealth and such growing popularity, the stock really may pay off.” Facebook Inc.’s IPO is expected to be the largest ever for an Internet company. It’s expected to raise as much as $11.8 billion for Facebook and its early investors — far more than the $1.67 billion raised in Google Inc.’s 2004 IPO. Analysts say there’s so much interest in Facebook’s stock that some underwriters are closing their books as early as Tuesday. This means they won’t be taking any more orders from potential buyers. The IPO is expected to be completed late Thursday, with shares available for trading Friday. Scott Sweet, the owner of advisory firm IPOBoutique, says the high demand also means that Facebook might raise the per-share price above $35, the high end of the range Facebook currently expects. Facebook and the IPO’s lead underwriter, Morgan Stanley, declined to comment. If you’re thinking of investing in Facebook, here are some things to consider. ■■ IPO SHARES Facebook and its early investors are selling more than
337 million shares, but those shares are parceled out very carefully, away from the public’s eyes. Typically individuals get to buy no more than 10 percent to 20 percent of shares sold at an IPO’s offering price. The vast majority will go to company insiders, institutional investors, the underwriters selected by the company to handle the process and preferred clients of all of them. Morgan Stanley leads the team of 33 underwriters selected for the Facebook offering, followed by JPMorgan Chase and Goldman Sachs. The inclusion of online broker E-Trade Financial Corp. as an underwriter was seen as a glimmer of hope that Facebook might make more shares available than usual for retail investors through discount brokerages. But chances of getting any are very slim regardless. ■■ ELIGIBILITY The big online brokerages have been taking formal requests from customers for Facebook’s IPO. They anticipate they’ll get their own allocations from one source or another, such as one of the underwriters. E-Trade, Fidelity Investments, Charles Schwab and TD Ameritrade, among others, have been fielding abundant queries. But the requirements they set on who gets them eliminate most small investors. Fidelity, which will be
getting an undetermined number of shares from underwriter Deutsche Bank, says customers should have $500,000 in their accounts and have made 36 trades in the past year to be eligible. Ameritrade’s account requirements are at least $250,000 and 30 trades in three months. Schwab’s are a minimum $100,000 or 36 trades in the past year, but the firm says it also has other requirements. E-Trade, as an underwriter, would not divulge specifics but acknowledged the customer interest. “It’s a pretty hot topic,” spokesman Brett Goodman said. Even meeting the requirements is no guarantee of getting shares. Joshua Freeman, an information technology professional in New York, knows investing in Facebook is risky, but he believes “it’s got a pretty good shot to make some money.” He has been investing with E-Trade since the mid-1990s and has about $200,000 in his account. But he’s pessimistic about his request for 100 Facebook shares at the IPO price, given the frenzy over the offering. “I’m hoping to get some but I’m guessing that I won’t,” Freeman says. “I’m hoping it follows the trend and goes crazy and then dips a little bit. If it does that, I may buy some on the open market.”
tre asure
Wide range of businesses participate in hunt From Page 1A Each week, area newspapers will publish locations where treasure hunters can pick up new clues. The locations where treasure hunters can pick up the final clues will be published the week of June 11. Businesses will provide the clues until June 19, and the grand prize will “wash ashore” June 20. Newspapers as close as Cortez, Dolores, Mancos and Dove Creek — and as far away as Blanding and Monticello, Utah — are scheduled to run the clue pick-up locations, Waters said. “It’s going to run everywhere,” she said. Businesses participating in the Treasure of Cortez Treasure Hunt purchased the $1,000 in Cortez Cash from the Cortez Retail Enhancement Association, Alexander said. In turn, the retail association promoted the treasure hunt in area newspapers. Participants in the hunt are not required to purchase items from any of the businesses that serve as clue pick-up locations, but the hunt will help shoppers learn more about merchan-
dise and services ava i l ab l e at local businesses, Waters said. Treasure Gayel Alexander ers huntmust pick up 28 clues to solve the puzzle of where “X” marks the spot. The Treasure of Cortez will “wash ashore” June 20, and whoever finds it first wins. Instead of finding $1,000 in Cortez Cash, the grandprize winner must find an item at the designated location where all the clues lead. Then the winner needs to bring the item to Love on a Hanger, Waters said. “I can’t give away what the treasure (item) will be,” Waters said about revealing the item’s identity before the treasure hunt, “but they will have to bring that in to Love on a Hanger to get the $1,000 in Cortez Cash.” Secondary winners will be determined by drawing names from a pot, Waters said. Each time a treasure hunter picks up a clue at a local business, their name goes in the pot one time for the drawing.
Although treasure hunters need to pick up 28 clues and solve them to find the grand prize, people who pick up fewer than 28 clues can still win a secondary prize, Waters said. Each participant can win a maximum of one prize. “If you pick up five clues, your name will be in the pot five times,” she said. “If you pick up 28 clues, your name will be in the pot 28 times — but you can only win one prize.” Treasure hunt sponsors include a wide range of businesses, such as Citizen’s State Bank, Four States Tire, Netforce PC, Shiloh Steakhouse, Slavens True Value Hardware and The Family Shoe Store. Alexander said it’s too early to provide much feedback on the treasure hunt since it hasn’t started yet, but she hopes if it goes well this year more businesses will get involved in the future. “I’m excited she (Waters) got as many businesses to participate as she did,” Alex-
ander said. “I hope it’s successful and grows into a bigger event next year. I think it has potential.” Treasure hunters must be at least 16 years old to participate. For more information about the Treasure of Cortez Treasure Hunt, contact Tiffani Waters at Love on a Hanger, 565-9075. Reach Russell Smyth at russells@cortezjournal.com or 564-6030.
Grace’s Soup Kitchen is in need of a cook’s helper on Tuesday’s and Thursday’s from 9 to 11:45. Grace’s is a nonprofit, all-volunteer, private organization supported by St. Barnabas Episcopal Church and by the compassion and generosity of local community people. Our mission is to feed the hungry without requirement or condition. Call Betsy at 565-7865 for more information.
budge t
School bus route decision could save money From Page 1A
sions on whether to return. Another possible cut the school board is considering is changing from dual bus routes to single bus routes for students when the district returns to a five-day school week next school year. This would save about $150,000. If the board followed the district’s suggestions to the letter on expenses, adjustments for operating budgets and the ideas for cuts, the budget would end up being $8,700 in the black. However that was before a contingency item for two positions or for an emergency was included at a cost of $100,000. “You need a contingency for something that may happen,” Rubadeau said, and added if the district had to dip into these funds it would be transparent and would need board approval. Rubadeau said more work needs to be done on the budget, but added she likes the work that has already been completed. “I think we have done an enormous amount,” she said. “We have a good plan here. It has been provided to (the board) to see if it was OK. The budget is always a specialty plan.”
$6,161 from the state. Rubadeau said the Oct. 1 count date on the number of students attending school in Re-1 is crucial because this is where the bulk of the money comes from. To make some of this money up, the school board is considering reducing its administration team by a few people to save up to $115,000. The chief of operations for Re-1 is currently held by Michael Canzona who is resigning from the district at the end of June and his position will not be filled. Rubadeau said some reorganization of some jobs will be done to ensure that this position is still covered. She also said the district is looking at a grant to fund a special education position. In the possible ideas for cuts, adjusting positions for the elementary schools of Mesa, Kemper, Manaugh and Lewis Arriola, along with possibilities that positions will be adjusted at the middle school and the high school are on the table. Adjusting these positions at these schools would save Re-1 more than $500,000. Rubadeau said while the contracts for all teachers and staff will be handed out May Michael Maresh can be 22, there are still employees reached at michaelm@corwho are still making deci- tezjournal.com
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