You're watching...
Scott Kessler, S&P Capital IQ head of technology research, on Facebook's choice to file for an IPO now.
Also in this playlist...
Auto-advance: ON
Auto-advance
This transcript is automatically generated
Markets Scott Kessler is the head of technology.
Sector equity research at S&P Scott thanks so much for joining us.
She really isn't a question why now I mean it doesn't seem like they need the money the market is not necessarily that great why are they doing this now.
Thanks -- -- -- I think there's one primary reason why faced a very well could come public sooner rather than later.
And that's due to FCC regulations you know we've been thinking that FaceBook could have arrived at this day.
A year or two or even more ago because essentially regulations state.
If a company has above a certain amount in assets and above a certain amount in shareholders.
They essentially but within three months after that year is concluded.
They have to file financial documents -- the SEC and the thought is if you're gonna file documents.
Why not take -- all the way and come public yeah we think that's largely what's driving what's going on here but it's not lost on us that a lot of other on the Internet and social media companies have come public over the last year.
Facebook's getting bigger and they probably have a greater requirements for capital and liquidity all those things together we think job.
Make it a decent time for them to look.
Now yet and the fact of the matter is as you're pointing out that they traded town on the secondary markets there's a lot of information out there -- -- really backing up against really having to do this.
So what does it say about the IPO market in general and -- what does it mean for the other players out there that they're coming out now.
Well I think in terms of -- What does it mean honestly I think FaceBook is coming public potentially.
Rather now or -- later.
Because.
It's something that.
Big companies that perceive themselves as bellwethers just do you.
Right yeah you really need to be a public company to be perceived as you know blue chip.
Type of business so to speak.
And the reality is I don't necessarily think that they're overly concerned about.
What's going on global economies are what's happening with markets except that they don't want something.
Like what transpired a couple of years ago where it seemed like.
The next day was in question right.
So if you look in the past.
Companies Bellwether companies in the Internet.
They haven't really been so concerned about wanna come public -- in 19988 Asian currency crisis.
PayPal in 2002.
And Google in 2004 that was a great year for opera comedies are markets -- music that this makes apple look even better -- -- Well I think at some respects what's gonna happen is people are gonna say.
Wow look at -- valuation.
For FaceBook look at this contrasts in FaceBook and guess what.
FaceBook is a very successful company and a lot of respects.
But it's going -- I think probably make people think OK well what are some other ways that we can kind of be your stay involved.
In investing in the technology area and that's terms on -- global in terms of social all these things are driving growth for what company.
Apple which stocks still seems very expensive here.
Do you think the present -- going to be anything we learn about face that -- -- through this process that makes us like get -- I mean certainly when Groupon can let you start to look hard at their revenues of the way that they generate Meyer book revenue.
-- people were less excited about the company does FaceBook have anything like that.
In its financials.
I mean I guess we'll find out but honestly having gone through this a couple of times of the number of companies.
I think it's fair to say that.
The notion of a great company.
Is a lot easier to kind of absorbed then when you have all the and that's as part of this process sure it wouldn't be surprised at all if people saw some things that.
They didn't like as much as they might have -- and that's kind of what happens sure home.
When facts come -- there devil's in the details Scott Kessler we're out of time thanks so much for joining us we appreciate it from one popular web.
