Roland Dürre
Wednesday May 23rd, 2012

Facebook Goes Stock Market …

When Mark Zuckerberg went public with facebook, he caused an earthquake. Not just in Italy and Bulgaria, but also in the media.

And now there is no end to the after-shocks in the media. Mostly, the headlines are nonsense, such as “Zuckerberg lost a billion”. Bild, too, was busy reporting (yesterday and six days ago). And in today’s Munich AZ, there is another article  on page one about the stock price of facebook.

So what did actually happen?

Marc Zuckerberg managed to place some of his stock on the market very much to his advantage. And he made a whole lot of money in the process.

So there are now a number of winners:

  • The banks who sold – they really profited from the deal big time
  • Mark – because he now really got a lot of money;
  • The US revenue office, because they took a fair share;
  • The enterprise facebook, because it probably now has quite a full war coffer.

Well, some parties might have lost through the deal. For instance the share holders. But it serves them right. After all, they continued believing into the mechanisms as before the turn of the millennium. In those days, everybody knew that shares of most “IPO’s“ were something you usually could sell at a huge profit shortly after they were sold out.

Mostly, this model used to work quite well. I myself was quite frequently offered “Family&Friends” shares. As a matter of principle, however, I never bought any and then I was angry with myself because, on the next day, you got twice what you paid in return.

With facebook, I can imagine that perhaps half of the share buyers hoped for such an easy and quick profit. The rest were probably “institutional investors“ who – at least in the short and medium term – followed the wrong “analysts”. Well, it is part of their business.

For the enterprise facebook itself, going public is something they need not be concerned about at all. Mark Zuckerberg still owns easily the majority of shares and thus can continue deciding the policy of the enterprise, as well as how the profit is to be spent and whatever else.

Basically, nothing interesting happened. Some spent money that, at least in the short term, is lost. Mark&FB, banks and revenue offices received exactly that money, sharing it among each other.

Perhaps facebook will eventually manage the sensational mercenary success that will justify the high investment. Or else not. But basically, it makes no difference. The success of facebook will definitely not depend on what the stock market says, let alone on what analysts say.

And the gamblers now have another horse on which to bet.

Now isn’t that nice for all parties concerned?

RMD
(Translated by EG)

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