Facebook - Becoming a Public Company

In February of 2012, the worlds largest player in social media, Facebook, decided to apply to conk turn up a populacely traded fraternity. Facebook had state that they were looking to raise approximately $5 billion dollars in hopes to finance projects that would ultimately amaze their company (Luckerson 1). With 845 million active agent engagers, little debt, and records of strong one-year profits; Facebook was evaluated to trade at $38/sh atomic number 18, estimating the companys worth at approximately $104 billion dollars. (Luckerson 1) The initial offering price had been record place for a newly mankind company. The IPO sparked a net ton of interest with investors that saw the severalise-so profit, and Facebook ended up altitude $16 billion dollars in investments. Since hitting the dividing line food market on May 18, 2012, Facebook soon trades at $77.70 and is evaluated at roughly twice their IPO. (Luckerson 1) Its safe to say that decorous public has worked out well for Facebook financially, but that isnt ever the case for others. wherefore do companies look to trade publicly, firearm some remain to curb private? How argon IPOs evaluated? \n\nWhy Did it Work for Facebook?\nThere are many advantages to being a publicly traded company. Shares of a public company are ofttimes more liquid than that of a private company because of the stock exchange. (Block 475) The stock exchange makes purchase and selling stock simple, and easy. This nitty-gritty the public companies can telescope investors much easier, quicker, and often at higher stock prices. other advantage is that companies can use stock as an motivator for employees. Using stock inducing plans, publicly traded companies can absorb and retain exceptional employees. (Block 475) Although the advantages of becoming a public company are enticing, there are some drawbacks. It might be in some companies outflank interest to remain private. unity of the biggest disadvantages is the added workload of being a publicly traded company. More specifically, elderly management will be re...