There is no GOOD reason for Facebook ( $FBOOK ) to go public.
For all intense and purposes, Facebook has been a public company for three years and it has not been that much fun for those in charge.
Don’t cry for Facebook or it’s employees. The employees and early investors have gotten all the liquidity they need.
The only cool way to IPO is through a ‘dutch auction’ and Google has already done it.
All that lies ahead for Facebook as a public company, even if they are immensely profitable, is financial engineering. In a sad state of how broken the markets are for profitable businesses, Microsoft must take on debt to create shareholder value. Profit does NOT pay you anymore as a common shareholder. Honestly, I am too small to care about this deeply. There is too much opportunity out there to worry or think about it in a conventional way (if you must though…read Aleph Blog’s post on $MSFT).
For those that think that Facebook NOT going public sucks for public markets….you are dead wrong. Facebook going public would mark a TOP. Things would get way too easy to value downstream.
The markets need mystery.
So Facebook…do the right thing and take on massive debt!
They’ve issued debt before–some through Western Technology Investments (which lent early and got cheap warrants) and $100mm through TriplePoint.
At current valuations, they would probably prefer equity, just because they’ll get more flexibility. At a $25b-$30b valuation, Zuck can raise a lot of money without giving up control. But if he has some kind of plan that involves switching from revenue growth to another goal for the next few years, debtholders might be able to stop it, while shareholders won’t.
i know western tech and they are good peeps.
You have to admit though, if $FBOOK did test the choppy IPO markets , it could be a pretty epic event and an absolute media frenzy. Plus I’m sure that StockTwits would get some great activity as one of its private ticker symbols went public :).
dare to dream but in the end, best they stay private for all the young
startups.
They've issued debt before–some through Western Technology Investments (which lent early and got cheap warrants) and $100mm through TriplePoint.
At current valuations, they would probably prefer equity, just because they'll get more flexibility. At a $25b-$30b valuation, Zuck can raise a lot of money without giving up control. But if he has some kind of plan that involves switching from revenue growth to another goal for the next few years, debtholders might be able to stop it, while shareholders won't.
I’ve often wondered what the real numbers are at FB. They’ve had about $900m pumped into get to about $1b in revenue. What are their net margins? Any ideas?
I've often wondered what the real numbers are at FB. They've had about $900m pumped into get to about $1b in revenue. What are their net margins? Any ideas?
Use of proceeds? More servers? That’s the tough thing about debt – the investors ask you questions. Unless you are already public debt=all the headaches, none of the potential upside. For $MSFT it is already in hell – so taking on debt is easy for them.
i was just joking in the post. that said. he could raise from some yutz
bank plenty of cash with a set of any projections he likes.
Use of proceeds? More servers? That's the tough thing about debt – the investors ask you questions. Unless you are already public debt=all the headaches, none of the potential upside. For $MSFT it is already in hell – so taking on debt is easy for them.
i was just joking in the post. that said. he could raise from some yutz
bank plenty of cash with a set of any projections he likes.
i know western tech and they are good peeps.
You have to admit though, if $FBOOK did test the choppy IPO markets , it could be a pretty epic event and an absolute media frenzy. Plus I'm sure that StockTwits would get some great activity as one of its private ticker symbols went public :).
dare to dream but in the end, best they stay private for all the young
startups.
False. The liquidity for FB shares thus far has only been possible because of the assumption of an IPO in the near to medium term. While it’s true that the terms of the ISO grants allow the shares held by investors and early employees to be sold to qualified buyers, the terms of the grant dictate that the shares cannot then be resold by the buyers in the private market — they must wait for an IPO. For this reason, the promise of the IPO is absolutely necessary for any liquidity to be possible… unless Facebook decides to revise the terms of their stock plan to allow for more transactions downstream — but this would only encourage more trading in the private market, which the company actually does not like, at all.
time will tell. i hope they stay private
As a former employee sitting on some shares, I have mixed feelings about the company staying private. Ignoring my reservations, however, I’ve been recently thinking about another scenario that could be very interesting, and also keep FB private:
I think Google should abandon the head-on attack on social and instead try to buy a huge chunk of the FB — enough that they can stop being threatened by the company’s success. Something like ~$10B cash for a ~25% stake in the company, with common shares carrying standard voting rights. A very large investment at a lofty valuation. Zuckerberg would retain all the control he wants (especially with the class B shares that have increased voting rights), and FB would have more than enough cash to grow and compete, while maintaining the freedom to take the large risks that Zuckerberg et al want/need to be able to take to keep winning in the social space. Google could save the huge development costs they’re currently facing as they try — pretty unsuccessfully thus far — to compete with Facebook. Moreover, by collaborating with Facebook and embracing their existing technology, Google could make many of their existing and new efforts much more competitive –> Android, Music, TV, etc. … And the benefits would snowball throughout the “App Era” if/when the Facebook APIs could be coupled with Google’s, empowering app developers to make more/better apps faster on FB and Google’s platforms — creating a more beautiful value loop to be enjoyed by both companies.
I also own a lot of GOOG stock (bought recently)
thanks for the comment and disclosure.
goog is wasting so much time and energy buying their way into a no win
situation. i like your idea.
I think goog is solid here but dont own any
False. The liquidity for FB shares thus far has only been possible because of the assumption of an IPO in the near to medium term. While it's true that the terms of the ISO grants allow the shares held by investors and early employees to be sold to qualified buyers, the terms of the grant dictate that the shares cannot then be resold by the buyers in the private market — they must wait for an IPO. For this reason, the promise of the IPO is absolutely necessary for any liquidity to be possible… unless Facebook decides to revise the terms of their stock plan to allow for more transactions downstream — but this would only encourage more trading in the private market, which the company actually does not like, at all.
time will tell. i hope they stay private
As a former employee sitting on some shares, I have mixed feelings about the company staying private. Ignoring my reservations, however, I've been recently thinking about another scenario that could be very interesting, and also keep FB private:
I think Google should abandon the head-on attack on social and instead try to buy a huge chunk of the FB — enough that they can stop being threatened by the company's success. Something like ~$10B cash for a ~25% stake in the company, with common shares carrying standard voting rights. A very large investment at a lofty valuation. Zuckerberg would retain all the control he wants (especially with the class B shares that have increased voting rights), and FB would have more than enough cash to grow and compete, while maintaining the freedom to take the large risks that Zuckerberg et al want/need to be able to take to keep winning in the social space. Google could save the huge development costs they're currently facing as they try — pretty unsuccessfully thus far — to compete with Facebook. Moreover, by collaborating with Facebook and embracing their existing technology, Google could make many of their existing and new efforts much more competitive –> Android, Music, TV, etc. … And the benefits would snowball throughout the “App Era” if/when the Facebook APIs could be coupled with Google's, empowering app developers to make more/better apps faster on FB and Google's platforms — creating a more beautiful value loop to be enjoyed by both companies.
I also own a lot of GOOG stock (bought recently)
thanks for the comment and disclosure.
goog is wasting so much time and energy buying their way into a no win
situation. i like your idea.
I think goog is solid here but dont own any
That would be “intent & purposes”. Sorry
That would be “intent & purposes”. Sorry
“Facebook going public would mark a TOP.”
What effect to you think the ginormous secondary offering planned by Petrobras will have on the market?
“Facebook going public would mark a TOP.”
What effect to you think the ginormous secondary offering planned by Petrobras will have on the market?