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"Facebook would not be happy that they only got $10." The question I would ask is: "who is it that isn't happy"? Employees? Their stock options are worth the
by JonFish85 11y ago
"Facebook would not be happy that they only got $10."
The question I would ask is: "who is it that isn't happy"? Employees? Their stock options are worth the same regardless of what the IPO price is. Investors? Same thing. New investors? They're getting an immediate return. I mean sure, the company doesn't get as much to put in the bank, but ultimately who is upset about that?
- joshu 11y agoReally? Can you think a bit more about this one?
- dsg42 11y agoThe company itself, which essentially just lost the difference in cost between the IPO shares and their actual value in cash. Okay, if you want to be really nitpicky, they didn't lose quite that amount. But they did lose a substantial amount of cash. Also, employees are likely hurt indirectly, as they can't sell their stock for 90 days. Underpriced IPOs flood the market with stock, potentially causing the price to collapse (as in the case of LendingClub) before they get to cash out.