Facebook's huge IPO
Mary Kissel and Shibani Joshi examine Facebook’s big move
- Duration 10:08
- Date Feb 2, 2012
Mary Kissel and Shibani Joshi examine Facebook’s big move
Also in this playlist...
This transcript is automatically generated
I still last may turn on TV maritime canonized by -- was still on talking about -- FaceBook IPO they drop the papers after hours -- it was about 430 she running yeah I roundup for 45 or fifty and I love -- anyone who was watching has to note that literally they him and they say.
Well I I just got them.
It is we -- OK I don't think you know we do it all the -- -- -- You're betting today that you deliver hours later anything totally GC or anything that caught yet you know clean -- black.
It it at a couple things FaceBook is and advertising company we think of it is -- -- -- that are fed up place where we like things in connected people let.
-- revenues came from advertising so we're talking about a company that is trying to compete.
Against Google and Yahoo! and -- and Microsoft.
Three point seven billion dollars in revenue so it's a pretty ES substantial in terms of its -- Four million dollars in cash and the other thing we learned was that Mark Zuckerberg he going anywhere anytime soon.
And what we learned in the S1 filing is that he had house 28 point 4% of the outstanding shares the largest single -- -- in the company.
But wish that he gets ten votes for every share so he S 56 point 9% of the voting power majority of voting power.
He also can mean a successor in the event it is gas and so to give some context here.
Voting -- majority top power is very common for.
Tech IP o.s IPO's and and general to give me an example rising as CEO.
Marking -- he has thirty to 36% -- of shares that has 70% of the voting power.
Google -- this.
Groupon did this -- it did this when they went public.
So not out of the realm of ordinary what is different is this whole succession clause never have I seen -- of people have been talking -- you seen.
On the succession clause -- even directly name your successor.
And the board of directors don't have to wait and you don't have to get approval from anybody -- is -- -- -- -- based.
That we haven't seen before and I -- in some he didn't name anybody and you know when does it mean as well and we don't know you know -- and that he that he's at no liberty and has no responsibility to name it.
Really and meaning it's an interesting look at Howell Mark Zuckerberg has built this company and we'll continue to maintain control.
Even though it is a public company.
Changing as far as that's concerned also what was interesting -- you read this line on air yesterday is that you said you know paste up wasn't.
But with what was the line here -- it was not originally created to be a company.
It was created to I guess just change -- world change the world right so this is like Steve Jobs will.
And I and and and and making money as a byproduct and -- what they believe the IPO's mission is it as well as a byproduct and kind of changing the world.
-- he said it is -- in that scene and he said oh.
You know going public is a favorite to our investors in our employees it wasn't never -- was never sort of the end goal for us and to -- I.
I believe that I have a lot of personal friends at work at FaceBook I have -- acquaintances.
Who have now become acquaintances through my work.
And they really -- the cost like I've been at a FaceBook headquarters had meetings there.
-- the people there and -- a culture that heat created it's a hacking culture.
He doesn't have enough that he does have an office but he sits and it's.
Vocal on the main floor where everybody -- Eighties -- -- and that was built by hand men and really is dictated by -- and if he cared about money he could have sold out along time ago he -- sold out to Microsoft and -- Yahoo! an end to so many probably countless -- I'm not sure -- my -- is motivating factor you know and I'm sure it registers in the back of his mind but.
I don't think this is why do you get something -- downloads yeah it is expected I don't -- -- we believe -- -- I.
-- get -- Q we have any idea when they're gonna do this.
I'm hearing the next time but you know as you know an SEC requirements.
Basically the blocking -- time as you file your ass line you can't go public for 6810.
Well in two months yeah eight weeks.
So it won't happen any sooner than like six to eight weeks from now.
Americans -- there will be next you -- journal editorial board what do you think -- -- -- -- Well if you can go through the financials until you're blue engine on -- a very nice job of that.
-- that you have to step back and ask a bigger policy question here which is why the company.
Of that size and profitability not go public earlier.
Dishonest sent the peso was forced into the -- PO because of government regulations.
Because a private company they can't have more than 499 shareholders.
-- so last year when they tried to sell more shares private investors they said you know what we're gonna breach this limit.
And we're gonna start reporting financials and now we have to intend to go public.
That tells you something bigger about the state of our financial system it tells you.
The number one the public markets -- broken.
Companies like FaceBook and you know let's say that you -- the apple of today.
Don't want that that regulatory scrutiny -- because it's simply too restrictive.
And it's and it's too onerous on them.
And what does it mean for the average investor -- -- people like my parents for example who invested their money in the seventies and the eighties in the stock market.
And participated in that huge upside from these very innovative companies.
Can't do that today because these companies to stay off the market when things those money was talking about was that they investors like the Goldman Sachs -- -- -- -- wanted to turn the money they sit on the money for -- hassle it was almost like they have no choice but -- -- of regulation.
They can't just -- some cash back to these people -- yeah there are other ways to to to do that I mean look.
If I see deregulation but a large part in this I think also it it's ultimately his goal to become a fortune 500 company.
So we knew it was gonna happen some time.
But based on my sources in the report -- -- also -- in the news on internally weren't really seriously thinking about this until about a year ago when I started coming up against these constraints.
Look I think FaceBook and this is a wonderful event.
Because it shows that we still -- spirits innovation in the economy despite all of the burdens that we are putting on private companies.
I hope more people have the opportunity to do this.
But they won't -- so long as you have this very very burdensome tax structure regulatory structure.
And frankly the tort -- out there.
Which exerts a lot of costs on companies in terms of legal liabilities.
Why are we talking about for example getting rid of sarbanes Oxley there's not a constituency out there today they can look back on Starbucks -- say -- -- success.
We he avoided a lot of failures you know when these -- the kinds of things we need to look at if we're going to encourage.
Not just more face took ideas today but the creation of more Facebook's in future years and went after regulations we've seen this FaceBook IPO earlier I think you -- But -- Cindy I still questioned why go why do it off to your point you can you can -- repay your investors anyway you want and why faces scrutiny -- now we know everything now we know they have a corporate -- now you know how to make things that I just needs now yeah well look at it again.
There are so huge and they have already taken on the burden of -- reporting these very extensive financial so there are you prepared to become a public company sticking diversified their investor base by doing this which is one of the things they said in the use of proceeds.
And they're building when it lets not forget they are going up against the huge tech titans of of the likes of Google and also -- huge Cache files they wanna get some of that capital in today.
They use it to build and not just defend against Google but to be proactive.
And to go out there and acquire and build us that they can become that fortune by.
You know companies money used to sit here when you think they're really interest me -- -- that Goldman Sachs was third not yeah.
And -- an investor yeah right so it was just like this -- -- -- yeah.
There is a big Drummond -- a big story that's behind that you know there is there was scuffle might see investment banks in and you wonder why.
Data shows Morgan Stanley mean Morgan Stanley does have a tracker for taking Groupon and and -- and -- and all these big guys public over the last here -- -- As well and maybe that played a role but it you know it's interesting it's interesting to choices that you FaceBook is making we don't know what it means we didn't know we can learn those what exchange -- -- -- on so again it will.
You know -- A precedent for our -- -- -- go hey you're not presuming how can -- and I say yeah they made -- sit down and not on the NASDAQ as well so.
A lot of people are gonna make money off this is not just C employees it's not just the investor is but there is oldest sword and ancillary stream are -- as of money that is going to get pumped out into the economy because of -- -- now that -- There's clearly gonna get up so yeah -- -- I don't look at globally Goldman totally mishandled that private share offering last -- not only issue -- Goldman does not have the distribution network that that that the housing market Stanley does -- -- through Smith Barney.
And an aspect of the business so plus save that also solution I said they have a great tech IPO group -- been very successful over the last twelve months there are a lot of things going against Goldman I think in this particular deal interesting I was actually hoping he would pull out from my little.
VC firm from -- Sun Valley and -- him down and -- is.
She might just as you know beyond that they end up boxes that we're all day long 2 PM -- Charles -- talking about this I'm sure there.
And the am so we did not get to talk about the president's.
Wouldn't -- housing stimulus and realize -- not.
-- over my -- anyway and I don't think it's gone anywhere though there's that may also wasn't doing either through -- again to the -- -- -- everything is -- -- -- -- --