May 10, 2012

Facebook's IPO - What to do?

Will 'irrational exuberance' drive up the price of Facebook shares at its IPO only to fall back soon after? Many rational folks caution this may be the case, but I'm betting many of FB's 900 million users will want a piece of the action on opening day. I'm not one of them.
From The Economist: "Investors who buy shares in the IPO will also have to accept that Mr Zuckerberg will continue to control more than 50% of the voting rights. “One person owning so much of a potential blue-chip company is more or less unheard of,” says Debarshi Nandy, a professor at Brandeis International Business School. Other tech firms, such as Google, have flourished under the tight control of small groups of founders, and Mr Zuckerberg shows every sign of maturing into an exceptional technology leader. But if something were to go badly wrong at Facebook in future, its shareholders will be able to do little more than give him a big thumbs down."

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