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Alex Sawden

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Did Facebook make the right decision by floating on the stock market?

I want to know whether you thought that Facebook made the right decision by going onto the stock market and allowing the public to buy shares into the company.

Topics: Ltd Plc facebook stock market
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    V Alexander

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    Jul 19 2012: I believe certain market forces presented information in a disinforming light, purposefully sparking an acquisition frenzy for a stock which did not even come close to representing the stipulated value, which in the schemers' defense was only exploiting the greedy lesser sharks and inept-or-hopeful nail-biting day-traders. But if Facebook stock was part of any fund in any managed portfolio for any length of time, I'd be fairly angry, even if the excuse was "We were playing the players, and the rest, well, they're just morons."
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    David Hamilton 50+

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    Jul 19 2012: I would actually ask a deeper question, has random members of the public owning a company, ever helped that company succeed?

    I always tend to think that a business does best, when the people who own it, are also employees.
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    Lejan . 30+

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    TED Translator
    Jul 18 2012: Hello Alex,

    I can't really see what Facebook is producing of 'true value'. It is nothing but a virtual platform were people meet - that's it.

    At the moment the only 'shield' against competition is popularity, which can be quite volatile in the future and in this media. Or is anyone still using Yahoo as main search engine today? Hand's up, please... ;o)

    So what is Facebook actually producing?

    They have a large number of users which could be targeted for advertising, but this is only related to popularity, which can not be guaranteed.

    So what is left to do is 'data mining' their users and to make money by trading those informations. Because this can only be done by a continues violation of consumer protection, which to many users has not become an important issue yet, the business model itself is highly endangered by a change in laws.

    If you take a closer look at their 'terms and conditions' you can already see that they are protecting this 'source' and that they already sparked attention of public media on this.

    To me, a business model of a company which is only based on 'popularity' and a lack in 'consumer protection laws' has therefore no long term substance to invest my money in it. But this decision is free to everyone and I just hope that the 'bubble bursting' year 2000 of this promising 'new economy' has not been forgotten completely...

    Well, we'l see... ;o)
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      David Hamilton 50+

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      Jul 19 2012: In other words... It was a great business decision, for the heads of facebook, to sell their interest in the company to the public, before the bubble burst : )

    • Alex Sawden

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      Jul 19 2012: Thank you for your replies Jan-Bernd and David. I am doing this for a college project where this question is my title. So we have discovered there long term future....actually they may not have one! Look at Facebook as a prime example, bought for £350,000,000 I think, then sold last month for £35,000,000! The flotation is also of said to have had effects on California, I also know that its cost NASDAQ millions too! What do you think of the amount of publicity they got through this flotation, I mean they say all publicity helps but this was all bad? To be honest guys I just want to hear your views of everything that been involved with the flotation because it will really help me! Thankyou!!!
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