David Rosenthal: evaluation

Transcript context

…For those of us kind of not from the industry, what is “lead-left”? So when investment bankers take a – speaking as a reformed investment banker myself – when investment bankers take a company public, there’s usually a consortium of banks that underwrite the IPO. But there’s one bank that’s the leader and that’s referred to be as being “lead-left” which is on the cover of the prospectus of the IPO. The bank that’s at the top and on the left, is lead-left. They get the biggest allocation of the IPO. And it’s always a huge battle amongst the big bulge bracket banks for hot IPOs and there was never going to be any IPO hotter than Facebook to be the lead left. Not only because they’d make a lot of money from it but the prestige associated with that. Well, in theory we’ll see what really happened, live on for a long time. So because of these two things that were happening, there was immense pressure on Facebook to finally go public in the 2012 timeframe. So, late 2011, they start preparing. They actually select Morgan Stanley, Goldman’s long-time rival, to be lead-left. They’re deep preparing for the IPO, and business is going great. For the year of 2011, they ended the year with 845 million monthly active users, 483 million daily active users. So doing the math on that, that’s over 50% DAU to MAU ratio, which means over half of Facebook’s users used it every single day, which is just incredible. Wild.…

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