While you will be able to buy shares after the social media giant has listed, the chances are slim that small South African investors will be able to participate in the initial public offering (IPO).

When Google listed in 2004, it sidestepped the big investments banks by launching a Dutch auction of its shares. Usually though, a company would appoint these banks to handle the listing of its shares on the stock market. The banks would allocate the available shares to their favoured clients. This means that small investors would almost always miss out on the traditional share price bounce in a much-hyped company’s first day of trading. (The Google share price jumped 18% on its first day.)

But with a Dutch auction (named after the bidding process in flower markets in the Netherlands), everyone gets to bid for shares. All investors get to place bids for what they would like to pay for shares and how many shares they would like. The company would then allocate shares on a pro rata basis to the highest bidders above a certain price level.

The Google listing process was not seen as a success – it had to cut both the size of its offering and lower the guideline price. The dramatic 18% “pop” on the first day was seen as evidence that the pricing process was problematic. Also, the company seemingly did not save much in the line of investment banking fees in the end. (It paid 2.8% to investment bankers to underwrite the bid, instead of the usual 4% – but critics say because of its status it could have negotiated the fees down anyway.)

Facebook apparently decided not to go this route. It has appointed investment banks like Morgan Stanley, JPMorgan Chase and Goldman Sachs to allocate the available shares before the listing.

This has caused some disquiet, as some contended that Facebook built its business on the lives of the “little people” and should have opted for a more democratic process. There’s some speculation now that Facebook may allocate a small portion of its shares to retail investors as a gesture of goodwill.

Following the listing, SA investors will be able to buy shares through local brokers dealing in global unit trusts that invest in Facebook.

Naspers shareholders will also hold a small stake in Facebook. Read more on Facebook and Naspers shareholders, get this week’s magazine here.