Morgan Stanley’s Gorman Said to Join Facebook Call on Price

As Facebook Inc. and Morgan Stanley executives gathered on a call May 17 to arrange terms for the social-networking company’s initial public offering, they faced a trade-off: set the IPO price low and give up enough money to let investors profit from a day-one pop -- or push the price high to help the company reap as much as possible from the sale.

On the conference call, joined by Morgan Stanley Chief Executive Officer James Gorman and Facebook Chief Financial Officer David Ebersman, the company and its lead bankers discussed an IPO price range of $36 to $41 a share, people with knowledge of the matter said. Ebersman’s aim was to maximize the company’s IPO proceeds and to cap the first-day increase at 10 percent, said the people, who asked not to be identified because the talks were private.