Am I the only one thinking that Facebook's IPO was actually a success? The point of the IPO is to sell your company shares at the best possible price and Facebook did it.
Compare to an A/B/C round for a startup. If you know investors are willing to pay $50m for the round, but you settle for $25m, then you just lost $25m and gained nothing.
I think the main reason FB is falling now, is not because the stock was not worth $38, but everyone that expected it to quadruple overnight is now selling.
On day 1 it was a success, but now it is a disaster for several reasons.
1. It is harder to attract people to come work for you when you company's valuation is going down. Obviously FB can afford to pay for talent, but that cost just went up.
2. If FB ever needed to get more investment money, people may be more reluctant due to this situation.
3. If your company was getting acquired by FB would you want to be paid in cash or Stock?
Compare to an A/B/C round for a startup. If you know investors are willing to pay $50m for the round, but you settle for $25m, then you just lost $25m and gained nothing.
I think the main reason FB is falling now, is not because the stock was not worth $38, but everyone that expected it to quadruple overnight is now selling.