Pages Menu
Categories Menu

Posted by on May 15, 2012 in Companies |

7 Things you should know about the arrival in the bag Facebook

(Cc) Eston

To be honest, the entry of Facebook to the bag hardly generate an impact on our everyday lives and our social network. However, many people will be talking about this financial move in the coming days, considering that Friday will be carried out the operation, which could become one of the largest stock market openings in history, appraising the social network to USD $ 96,000 million. Facebook will trade on the Nasdaq under the symbol “FB”.

- Why Facebook serves enter the bag?

Simply put, to get money. Upon entering the stock market reached a very large bill that will allow you to invest and grow the company further. It is expected that the initial price of the stock when it will commence trading between $ 28 and $ 35 per share.

It is hoped that with the entrance to bag Facebook for pocket carry about USD $ 13,600 million, you can spend on whatever you want, as a new Instagram, patent lawsuits, or anything else.

- Why is entering the bag now?

Facebook is an unusual company. Typically companies try to enter the bag quickly to get resources, as did Groupon , LinkedIn or Zynga . But the social network is kept private for a long time, which means it is much more mature than others, but also implies that its potential growth is lower than other younger companies because much of the work is already done.

- Are there questions about the future of Facebook?

One of the great slopes of the social network is the mobile area, where the site has not managed to decipher a pattern. The purchase of Instagram would be a measure to demonstrate that they are interested in taking this issue seriously, though no one is clear about how to integrate the service with Facebook, or how you will make money, considering that Instagram had no earnings.

- It is said that Facebook shares are overvalued. How can they be if not yet publicly traded?

The reviews on this subject are that, with a share to $ 35, Facebook would be valued at 70 times 2012 expected earnings of the company. An action for Google for example costs $ 610, a value higher than the social network but less than 15 times projected earnings for the company for the year. So although $ 35 is much less than USD $ 610, as may be overvalued relative to earnings potential that the company has.

- I can buy a stock?

Technically yes, although it is difficult because on Wall Street tend to agree to divide the openings early public. On the Internet, companies like GiveaShare and OneShare papers sold company just starting to be traded on the market. This option involves paying more per share due to charges made by companies for the transaction (amounting to USD $ 39).

- Who will control the company now that many shareholders?

Facebook will put 180 million shares in its initial offer, more than 157 million coming from existing shareholders, including the CEO, Mark Zuckerberg, it will sell 30.2 million shares (which could profit income for $ 1,060 million). Even with the sale, Zuckerberg will remain the majority shareholder, controlling 57% of the shares entitled to vote.

Among the shareholders are also sold Microsoft, Peter Thiel, Bono (through Elevation Partners) and Mark Pincus (Zynga).

- What will change in Facebook once you open the bag?

What you can expect is that the focus of Facebook becomes “generate the most money possible.” While the arrival in the bag serves to raise money, the “bad side” is that the company will have to answer to all shareholders who invested in the company, which seek a profit whenever possible. So even though Facebook says it cares about user experience (and privacy) over all things, the money will be in the area of  high priority.

Some of these changes can already begin to see, as paid posts announced last week, allowing all your followers to see. Right now, Facebook’s revenues are generated from advertising on pages, in addition to getting a portion of the revenue generated by other applications running on the network. More initiatives of this type could occur in the future.

Tags: , , , , , , ,