English and Literature
Submitted By xczx
The social networking company Facebook, Inc. held its initial public offering (IPO) on May 18, 2012. The IPO was one of the biggest in technology, and the biggest in Internet history, with a peak market capitalization of over $104 billion. Facebook's founder and chief executive Mark Zuckerberg had for years been unwilling to take the company public and he resisted a number of buyout offers after Facebook's founding. The company did, however, accept private investments from companies--often technology firms.
Question 1: What made Facebook go to public on May 18, 2012?
Many reasons, what made Facebook going to public on May 18, 2012, but there are only 3 main reasons which are: * SEC Rule: The key reason Facebook is going public is because of an antiquated Securities and Exchange Commission rule from 1964 that says that any private company with more than 500 "shareholders of record" must adhere to the same financial disclosure requirements that public companies do. That means filing detailed quarterly and yearly financial reports, and dealing with all the scrutiny that comes with a powerful company opening its books. * Employees will breathe a sigh of relief: One big upside is that many employees can start cashing out, and the newfound wealth of a successful Facebook IPO would be widespread enough that it should be easy to spot. Given that, going public is important to help Facebook keep good people, although some newly rich always bolt (as happened at Google). It should also cheer up those with restricted stock units, which plenty of Facebookers have privately griped about. * Enhancing The Liquidity of Share: Zuckerberg can make bold bets, especially given that the company is reportedly planning to sell just 10 percent of the company to the public. He and his team will still be very much in control. Facebook would suddenly see…...