How small investors can get in on Facebook IPO

You might think that scoring a stake in Facebook’s initial public offering if you are an average investor is like trying to change your privacy controls on the social networking site — seemingly impossible.

But it turns out that Facebook is making an effort to have some of its hotly sought after shares accessible to all. In its updated IPO prospectus filed late Thursday, Facebook added E*Trade, the popular low-cost online trading firm, to the list of what is now 33 underwriters of its offering.

“The only reason Facebook would ever authorize E*Trade as an underwriter is because it wants broad retail distribution of its IPO,” said Scott Sweet, senior managing partner at IPO Boutique, a research firm tracking new offerings.

That means that users of E*Trade’s online brokerage service will have an opportunity to buy shares of Facebook at the IPO price, which should be between $28 to $35 per share. E*Trade (ETFC) has 2.8 million brokerage accounts..

Shares of an IPO are primarily distributed to institutional investors, mutual funds and hedge funds who are the biggest clients of the major Wall Street banks that manage the sale of the shares. On average, these brokerages only allocate 15% of their initial offering to retail investors, said Sweet.