Facebook’s Initial Public Offering

The reasons for Facebook to go domainIn the beginning, Facebook, through its part Mark Zuckerberg, was unwilling to go public and refused a number of buyout offers. However, it reached the euchre threshold after accepting private investments from firms, which eventually made Zuckerberg finalise to go public. The Securities and Exchange Commission (SEC) requires that private companies reaching more than five hundred shareholders of record must abide by the same requirements of financial disclosure undertaken by public companies (Sloan, 2012).It is clear that Facebooks decision to go public through an initial public offering (IPO) was not the same as the common reasons of firms when they undertake the same decision, which is to draw more revenues (Palmiter, 2008). However, in the foresightful run, Facebook also aimed to access external financing as a outlet of IPO (Sloan, 2012).The reasons for companies to go public beyond their need for more gold are enhanced financial condit ion, ability to cash out, advanced bodily reputation, and improved opportunity for future acquisition (Peng, 2012).The dollar objective of each company in relation to the amount expected to be embossed via IPOThe dollar objectives of companies entering IPOs for increased revenue purposes are to break-dance reserves and increase external funds (Vedavalli, 2007 Sullivan, 2007), access capital (Dana, 2004 Ernst and Hacker, 2012), improve financial condition, increase shareholder value, and improve capital to sustain harvest-tide (Ernst and Hacker, 2012).In Facebooks case, its stock price dwindled as there were concerns nigh its overpriced IPO and long-term business outlook and lost just about $ 25 billion in value (Kuratko, 2012).The expected use of the silver raised by IPOOne expected use of the money raised by IPO is retiring from debt, in which, it is necessary to profits close attention to the companys financial data and boilersuit growth prospects. Another is enjoyment o f the proceeds by the owners of the shares, especially for the sales event of secondary shares. Moreover, change primary shares (newly created shares) from an IPO increase revenue to the companies accounts (Khurshed, 2011).In the case of Facebook, the company raised a large amount of money, which has amounted to $ 18 billion. In actuality, there was no increase in the number of shares it sold to the public instead, most of the new shares were from Zuckerberg, and such was considered not a in force(p) sign (Khurshed, 2011).ReferencesDana, L. (2004) Handbook of research on international entrepreneurship. Glos, UK Edward Elgar Publishing Ltd.Ernst, D. and Hacker, J. (2012). employ international corporate finance. Berlin Verlag Franz Vahlen GmbH.Khurshed, A. (2011). Initial public offerings The mechanics and performance of IPOs. prototypic Edition. Hampshire Harriman House Ltd.Kuratko, D. F. (2012) Entrepreneurship Theory, process, practice. NJ John Wiley & Sons.Peng, M. W. (2012). Global strategy. Mason, OH Cengage Learning.Sloan, P. (2012). Three reasons Facebook has to go public. Retrieved on December 3, 2013 from http//news.cnet.com/8301-1023_3-57368449-93/three-reasons-facebook-has-to-go-public/Sullivan, L. R. (2007). Historical dictionary of the Peoples Republic of China. free state A Scarecrow Press, Inc.Vedavalli, R. (2007). Energy for development Twenty-first century challenges of repair and liberalization in developing countries. London Anthem Press.