Friedman Billings to Sell IPO Stock over Internet
Ring, Niamh, American Banker
The investment bank Friedman, Billings, Ramsey Group threw its hat in the on-line ring last week.
The Arlington, Va.-based investment bank launched an Internet company, FBR.Com, that will sell stocks it underwrites directly to the public.
Friedman Billings will sell up to 20% of all initial public offerings to retail investors through FBR.Com, which it is billing as an on-line investment bank.
FBR.Com is the firm's first foray into retail distribution, said Suzanne Richardson, a Friedman Billings managing director.
The firm has distributed IPO stocks to institutional investors only.
Retail investors would have to buy at least 100 shares of an IPO, Ms. Richardson said. They would also have access to hedge funds and venture capital investments.
"The Internet is changing our business overall," Ms. Richardson said. "If we didn't do it, we would be asleep at the switch."
With billions being invested on-line, industry leaders such as Charles Schwab & Co. have sought to differentiate themselves by offering slicker services, including access to IPOs. Schwab has done some equity underwriting since 1997.
In turn, firms that underwrite securities, such as Goldman, Sachs & Co. and Merrill Lynch & Co., are taking steps toward on-line capabilities. Goldman recently announced plans to take a 22% stake in Wit Capital Group, an on-line firm. Merrill plans to use its proposed acquisition of the technology arm of D. …