Whiny bankers snipe at Facebook.
Facebook is getting some grief today for choosing to buy Instagram before going public, rather than waiting to make the $1 billion purchase until after its IPO.
From the New York Post:
No wonder the source doesn’t want to be identified: It’s a ridiculous suggestion. In fact, it borders on asking Facebook to commit fraud.
If Facebook is planning to make a $1 billion acquisition, the largest in its history, isn’t that a material fact that prospective investors should know before they buy shares? Or does the source expect Facebook to hide its intentions, thus inviting plaintiff’s lawyers to descend on Palo Alto like ants on an abandoned picnic? Surely the source doesn’t expect Facebook to announce that it’s thinking about buying Instagram for $1 billion, and just letting that possibility swing in the wind for the next month.
No, this complaint isn’t about whether or not Facebook is doing right by its eventual shareholders, or even by its own balance sheet. And this isn’t about the concerns that Facebook could face antitrust scrutiny for anti-competitive behavior. It’s about bankers bitching that their job just became incrementally harder.
More from the NY Post:
First, “late in the process” is relative. Most $1 billion acquisitions take months to marinate, but Facebook pulled this entire process off in just a matter of days. That makes it entirely possible that Facebook’s underwriters knew about the Instagram offer within 24 hours of it being made. In fact, it’s likely.
But, again, the bankers are complaining because they’ll now have to do a bit more work before collecting their Facebook fees. Rather than just collecting orders, they may also need to field a few questions. In other words, the low-hanging fruit has risen a few centimeters.
Whether or not Facebook should have paid $1 billion for Instagram is a legitimate topic for debate. Whether it should have done so in late May rather than in early April is not.
Sign up for Dan’s daily email newsletter on deals and deal-makers: GetTermSheet.com