The initial public offering for Mail.ru Group is reportedly over-subscribed. Why the sudden interest in a Russian email company? It probably has something to do with the fact that the company owns stakes in both Facebook and Zynga.
A Reuters story in the New York Times reports that the IPO for Mail.ru Group is well over-subscribed, with two weeks to go before final pricing. (If you can’t get past the paywall, try the NY Times Deal Book blog instead). The company was looking to raise up to $876 million for a 16% share of the company by floating on the London Stock Exchange on November 8. However, total bids as of Tuesday night reportedly totaled $1.1 billion already.
The interest is reportedly coming from internet investors rather than anyone in Russia. For many investors this would be the only way to get their hands on Facebook stock, albeit indirectly. Both Facebook and Zynga are yet to float on the stock exchange and have been taking measures to prevent too many shares being sold privately to avoid higher financial reporting obligations and associated compliance costs. Since Mail.ru Group would remain as a single investor in Facebook and Zynga, the Russian company’s IPO should not make too much difference.
We should also note that Mail.ru is not including the majority of their Facebook stake in this IPO. Instead they are keeping that component private as originally published by Inside Facebook.
Source: All Facebook
Friday, October 29, 2010