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How Going Public For Facebook Has Affected The Company - Research Paper Example
Author : mayerlibby
Finance & Accounting
Pages 12 (3012 words)
The issuance of an IPO consequently transformed the status of the Facebook Company from a private entity to a public company because it became listed on the public stock exchange market…
Since that time, it has seen its users numbers grow to over 900 million users who are active. Handset devices are the majorly used by the Facebook subscribers. As typically anticipated, changing a company’s status from a private to a public status happens to be a commemorative period for the commercial entity holder, as well as, the management. The IPO signifies a reward for periods of thriving practices of the Facebook Company and the affirmative reception by the consumers. Nevertheless, the taking of the Facebook Company happened to highlight the significant weaknesses perhaps as an entity that is not geared up to see through the extra burden of finances and consequently lack of control. This is brought about by the initiation into the market of the stock exchange. As is the norm when preparing a company for an IPO issuance, a company cannot put out the information regarding its finances with any prospective investors or present investors through the quiet period. Therefore, investing in the company comes out blindly, a case that could make the investors lose their finances on the takeover supposing the company is overvalued as is the Facebook Company. In the process of making acquisition briefly after the IPO, since the overvaluation result in the unreasonably investors being buoyant, there is bound to be an overpayment. ...
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