3 ms·

I don't get it, why would it be priced perfectly ? Why would you want it to decrease ?

by cake 14y ago

ceejayoz 14y ago
Facebook only gets the IPO money. If the shares double on opening day, it's a sign they could've made a lot more money (or given away less equity for the same amount of money). Zuckerberg et. al. did pretty well out of this.
- phamilton 14y ago
  No they didn't. They would have if they had dumped all their shares the first day, which they did not. Zuck's net worth may have dropped 10% this morning (depending on how many shares he sold yesterday).
  - ceejayoz 14y ago
    > No they didn't. They would have if they had dumped all their shares the first day, which they did not. I'm talking about the money Facebook made off the IPO shares, not the net worth of Facebook employees. > Zuck's net worth may have dropped 10% this morning (depending on how many shares he sold yesterday). Changing the IPO price wouldn't have changed that. If they'd opened at $15 and popped up to $35, Zuckerberg's net worth would still be the same as it was when it opened at $38 and dropped to $35... but Facebook itself would've gotten much less money out of the IPO.
    - drstrangevibes 14y ago
      i agree the 51% that has been retained is there so that he can retain control, he doesnt actually care if it tanks , his made a huge wad and still has command, perfect!
      - ceejayoz 14y ago
        Well, minority shareholders do have some rights. They can sue him for breach of responsibility if he runs things into the ground.
loceng 14y ago
Because stock value, after you've gone to the pay window / sold the initial amount to make your investment money back and make money for founders, doesn't really matter to the founders / investors. They know that it's not tied to any real internal metrics. Stocks are a game. Game for the economy when people who don't understand are better high-risk and don't have a clue about internet evolutions / the cycles online. Facebook took advantage of that. Smart? Sure. Abusive? Yup - though they haven't shown much care for what they do to users/consumers anyway.
- brown9-2 14y ago
  This seems like a short-sighted outlook, as it ignores the fact that the stock price matters to employees who have been given shares as incentive, and it also matters for the company's ability to raise money via selling shares again in the future.
  - ralfd 14y ago
    Hm. But for an employee with stock (they have a six month lock in selling) there is really no difference in 1) FB making IPO at $30 and rises to §33 second day or 2) FB rakes in $38 and falls to $33 on second day.
  - mikeryan 14y ago
    Most stock grants to employees are at a particular locked in strike price and they can't sell for 6 months or so anyway. So their "buy" price as already set and their "sell" price was going to be set by the market anyway. This is the only time FB can set the price. Any later sales of shares will be market priced.

I don't get it, why would it be priced perfectly ? Why would you want it to decrease ?

by cake 14y ago

I don't get it, why would it be priced perfectly ? Why would you want it to decrease ?

Facebook only gets the IPO money. If the shares double on opening day, it's a sign they could've made a lot more money (or given away less equity for the same amount of money). Zuckerberg et. al. did pretty well out of this.

phamilton 14y ago
No they didn't. They would have if they had dumped all their shares the first day, which they did not. Zuck's net worth may have dropped 10% this morning (depending on how many shares he sold yesterday).
- ceejayoz 14y ago
  > No they didn't. They would have if they had dumped all their shares the first day, which they did not. I'm talking about the money Facebook made off the IPO shares, not the net worth of Facebook employees. > Zuck's net worth may have dropped 10% this morning (depending on how many shares he sold yesterday). Changing the IPO price wouldn't have changed that. If they'd opened at $15 and popped up to $35, Zuckerberg's net worth would still be the same as it was when it opened at $38 and dropped to $35... but Facebook itself would've gotten much less money out of the IPO.
  - drstrangevibes 14y ago
    i agree the 51% that has been retained is there so that he can retain control, he doesnt actually care if it tanks , his made a huge wad and still has command, perfect!
    - ceejayoz 14y ago
      Well, minority shareholders do have some rights. They can sue him for breach of responsibility if he runs things into the ground.

loceng 14y ago

Because stock value, after you've gone to the pay window / sold the initial amount to make your investment money back and make money for founders, doesn't really matter to the founders / investors. They know that it's not tied to any real internal metrics. Stocks are a game. Game for the economy when people who don't understand are better high-risk and don't have a clue about internet evolutions / the cycles online. Facebook took advantage of that. Smart? Sure. Abusive? Yup - though they haven't shown much care for what they do to users/consumers anyway.

brown9-2 14y ago
This seems like a short-sighted outlook, as it ignores the fact that the stock price matters to employees who have been given shares as incentive, and it also matters for the company's ability to raise money via selling shares again in the future.
- ralfd 14y ago
  Hm. But for an employee with stock (they have a six month lock in selling) there is really no difference in 1) FB making IPO at $30 and rises to §33 second day or 2) FB rakes in $38 and falls to $33 on second day.
- mikeryan 14y ago
  Most stock grants to employees are at a particular locked in strike price and they can't sell for 6 months or so anyway. So their "buy" price as already set and their "sell" price was going to be set by the market anyway. This is the only time FB can set the price. Any later sales of shares will be market priced.