An inside look at how banks jockey for “left lead” status on an IPO—especially one as big as Facebook’s:
“For the past couple of decades, Goldman Sachs and Morgan Stanley have ruled the tech IPO business, with one of the firms serving as lead manager on most of the hottest deals.
“Goldman took Microsoft, Yahoo, and eBay public, for example. Morgan won Netscape and Google. Although other firms have picked off an occasional deal over the years, when it comes to tech banking, Goldman and Morgan remain in a class by themselves. To be sure, having Morgan or Goldman take you public is no guarantee of success—they’ve banked plenty of dogs. But going public without Morgan or Goldman means signaling that you weren’t good enough for Morgan or Goldman. In other words, that your company is second-rate.
“In the last few years, though, there has been a shift in the Morgan-Goldman power balance in the Valley. Specifically, until very recently, Morgan Stanley has won almost all of the hot IPOs.”