What IPO at the end?
IPO means an initial public offering, which in good French, it means that the company is in the stock market. Or, if you’re in the mood before the war, Facebook is a debutante ball.At its most basic level, IPO is an opportunity for companies to raise lots of money very quickly. In this case, Facebook would sell $ 5 billion in capital to outside investors, and will use that money to expand their business / buy a yacht.
It’s $ 5 billion may seem like a lot, but in fact, about half of what was rumored (until, well, it’s a new rumor). And it is not enough, given that the total value of Facebook, a public company, should be a whopping $ 100 billion. If these figures continue, Lowball IPO because Facebook does not want egg on his face, if you set the starting price is too high in the award of a degree, no one gets a day.
So I can buy shares today on Facebook?
No! Sorry. What is reported to occur today (and almost certainly this week) is that Facebook is the filing of an IPO propectus the Securities and Exchange Commission. Prospectus will be fun to read to finance the national level, in-depth look finances, forecasts, and how Facebook sees the competitive environment.
So when Facebook finally he said, as he thinks it’s worth. Or rather, how many investment banks, he hired (allegedly, Morgan Stanley and several others, in this case). And when I say “should”, I mean, how much money he has in the bank or the amount of revenue that it takes several inches huge (about 100 billion dollars), you hear associated with a false Facebook Today, I think. This is how society will be interesting, as it continues to grow over time.
After the prospectus has been submitted, there is a “quiet period” while the SEC said its action. Conclusion: If we assume Facebook to files of all its work today, and they are all in order, it take several months before the actions Facebook actually on the list.
So I can buy shares Facebook then?
Again, no, sorry, but almost certainly not. It’s $ 5 billion to spend, perhaps, said to her. It is important to remember that many actions are already Facebook. A year ago, Goldman Sachs is the leak showed how big a piece of cake Facebook. This table breaks Learnvest is nice.
Two things from this: first, all on the table will be very, very rich. Evaluation at that time was $ 50 billion, can now double. It is they who will see the base salary, all others are gambling that shares off Facebook, Google did in 2004. Basically, what I say, good job, Sean Parker!
Second, even if you wanted to take a bet, there is a long, long queue in front of you. IPO is not the democratic process. Banks to help solve the Facebook, how much it costs, how many shares to offer and at what price? They are not only there (still profitable) of the Commission. They also get dibs first to their large institutional clients, commitment and the vanguard of the world’s first dibs on any share in the supply of new warm. And there was no one hotter than Facebook for years.
How is it bad? AP notes that an IPO large institutional investors tend to get up to 90% of the shares, before Joe Investor can get involved. And the probability that there are many investors with large portfolios and Joe the best modules you and me. The shares will be available at the end, of course. Once the stock has increased to the point that the big dogs at home collection.
Why is it important then?
In the short term, it is not. At least not financially, not to you. No, if Facebook does something incredibly unorthodox, to make more shares available to its 800 million users. It is not beyond the realm of possibility, it’s just a potential nightmare. And when one day you will pay billions of dollars, you want it to go as smoothly as possible.
But in the long run, Facebook is a public company has potentially enormous consequences. Private companies can afford the luxury of running what they want. They can focus on long-term strategy rather than short-term gains. Public companies, however, must go before shareholders every three months and explain how and why they have no loss of money as other people.
This pressure can make the company loses sight of what made it successful in the first place. Facebook, in particular, will immediately be under fire for not doing more to take advantage of each user. His income is significantly below expectations, and if he does not find a way to grow quickly, it will be hell to pay. For a company that already tend to be tricky, that anger can be the spark that ignites the powder keg of privacy and open graphics.
For now, however, do not worry. Let your banker friends low compared to an operating profit of Facebook, and cash flow today. Lift the glass of huge salaries Bono in May. And prepare for a possible attack on Facebook on your wallet, ready to sacrifice to Mammon and Morgan Stanley.
0 comments:
Post a Comment