Facebook - Becoming a Public Company

In February of 2012, the worlds largest player in friendly media, Facebook, decided to apply to do a habitually traded troupe. Facebook had express that they were looking to raise or so $5 billion dollars in hopes to finance projects that would ultimately amaze their company (Luckerson 1). With 845 million alert utilizationrs, little debt, and records of strong yearbook profits; Facebook was evaluated to trade at $38/sh ar, estimating the companys worth at approximately $104 billion dollars. (Luckerson 1) The initial offering price had been record background for a newly semipublic company. The IPO sparked a short ton of interest with investors that saw the capableness profit, and Facebook ended up heave $16 billion dollars in investments. Since hitting the line of credit market on May 18, 2012, Facebook currently trades at $77.70 and is evaluated at roughly twice their IPO. (Luckerson 1) Its safe to read that worthy public has worked expose well for Facebook finan cially, but that isnt incessantly the case for others. why do companies look to trade publicly, composition some remain to propitiate 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 much(prenominal) more liquid than that of a private company because of the stock exchange. (Block 475) The stock exchange makes buy and selling stock simple, and easy. This style the public companies can move over 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 incentive plans, publicly traded companies can inveigle 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. unmatched of the biggest disadvantages is the added wor kload of being a publicly traded company. More specifically, senior(a) management will be re...