(WSJ) Facebook Inc. FB +0.26% makes it easy for the social network’s 1.16 billion users to “like” funny photos, snarky comments and their favorite products. Next on the list: initial public offerings.

Globant SA, a Luxembourg company with operations based in Buenos Aires, filed Tuesday for a U.S. offering that would be the first IPO to use the system. Globant will set aside up to 1% of the shares in the technology firm’s IPO, which could come next month, for sale through a Facebook page or the Web.

Globant’s Facebook sale will take place using a technology being sold by Loyal3 Holdings Inc., a San Francisco social-media firm and broker-dealer. Investors who hold accounts at Loyal3 can indicate their interest in buying between $100 and $2,500 of stock. They then receive a number of shares based on how the offering is priced.

The technology doesn’t seek to upend the traditional IPO business, which has been controlled by large financial firms that sell shares and the pension funds and other institutions that buy the lion’s share of them. Loyal3 will sell shares alongside Wall Street firms such as J.P. Morgan Chase & Co. and Citigroup Inc.C +0.75%
The move marks the latest effort to lure small investors into IPOs.

Individuals often are seen as a desirable demographic in a market that is increasingly trafficked by computerized traders and other firms that hold shares for as little as a fraction of a second, though some observers say the effort makes more sense from a marketing point of view than as a way to broaden a company’s investing base.

“It’s an opportunity not so much to raise more money or sell more shares, but a way to bond with customers,” said Jay Ritter, a finance professor at the University of Florida.

Reaching out to individual investors is nothing new.

Google Inc. used a public auction for its IPO in 2004. Boston Beer Co., SAM -0.40%the brewer of Samuel Adams, set aside a large slate of its shares for customers in 1995 and gave them a better price than big investors.

Internet phone company Vonage Holdings Corp. VG -0.06% in 2006 sold stock to customers using what is called a “directed-share program,” in which a slate of shares are set aside by a company specifically for employees, customers or friends of its management.

But most efforts to change the IPO process have been abandoned. Companies such as Wit Capital and StockPower built platforms to sell stock to small investors in the late 1990s and early part of the last decade, but demand ebbed as the dot-com bubble burst.

“Loyal3 has a great platform and the potential to change” the IPO process, said Richard Truesdell, co-head of the global capital-markets group at law firm Davis Polk & Wardwell LLP. But there is still “wariness on the part of banks and issuers” to alter the traditional process, he said.

Some market observers argue that more involvement by individual investors is critical to the continued revival of the IPO market. More than 80% of a typical IPO is sold to big institutional investors, with the rest often going to good customers of full-service retail brokerages affiliated with major investment banks.

“Our goal is to really make Loyal3 the platform for everyday investors,” said Barry Schneider, CEO of Loyal3, in an interview in May. The firm declined to comment this week, citing quiet-period rules for underwriters.

The U.S. this year is on track for more than 200 IPOs, the most since 2007. But that is a far cry from the many hundreds of companies that went public each year in the late 1990s. Banks have generated $1.53 billion in fees on U.S. IPOs year to date, according to data provider Dealogic.

“I don’t think it does anything wonderful for the economy,” said David Weild IV, chief executive of Weild & Co., an investment bank that advises companies on the IPO process. Mr. Weild has criticized changes in U.S. stock-market structure that he says have led to fewer IPOs and a slowdown in job creation. “I think it will have a fairly narrow application.”

For IPOs, Loyal3 account holders will pay the same price that big institutions do, which is determined by the company and the investment banks underwriting the deal. Loyal3 will receive an underwriting commission as a co-manager of the IPO from the company selling shares.

Loyal3 already has some non-IPO clients.
Lucky Brand, a clothing company, has a link on its Facebook page that enables fans of the company to buy stock in its parent, Fifth & Pacific Cos., FNP +0.36% “in just 3 clicks.”
Some advisers to companies worry about exposing customers to the volatility of a company’s share price after its IPO. For example, while the Google and Boston Beer IPOs were winners for long-term investors, Vonage remains below its offering price.

“It’s dangerous to wrap your customers up in a product that may stumble out of the gate,” said Lise Buyer, principal at Class V Group, which is based in Portola Valley, Calif., and advises technology companies on the IPO process.