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How did Facebook's IPO go so badly? (It's generally agreed upon that it went horrifically for Facebook and its shareholders, right?) Is it, in a very stylized w
by scarmig 14y ago
How did Facebook's IPO go so badly? (It's generally agreed upon that it went horrifically for Facebook and its shareholders, right?) Is it, in a very stylized way, Wall Street in just wanting to extract as much money as possible from a target and not really serving the interests of the client?
If so... how can that market be disrupted?
- calciphus 14y agoIt went badly because a few groups had tried to inflate the stock for its IPO, and as soon as folks got their hands on financials that became apparent. Without a revenue plan and saddled with immense costs, that company is generally not fiscally healthy, certainly not enough to justify 100x valuation over annual profits.
- duaneb 14y agoPeople had unreasonable expectations because it was one of those Big Silicon Valley IPOs, which have traditionally paid off very well. I suspect that most people thought (without evidence) that Facebook had some magic revenue device up their sleeves. Perhaps Facebook also thought they would be given more time to produce on the investment.
- dchuk 14y agoA company's customers determine its value. Facebook's customers are advertisers, not stock purchasers. Advertisers have valued them at a few billion dollars. The stock purchasers put that value at over $100bn. For some reason, people took the stock purchaser's word over the actual customer's word.