...to Dr. Chaiwuth Tangsomchai Course work 702711 Financial Management) Master of Business Administration for Executive(Chiang Mai) Business Administration Chiang Mai University March, 2012 - - Index - Page Chapter I Introduction & Objective 1.1 Introduction 1.2 Objectives Chapter II Company 2.1 Facebook, Inc. Profile 2.2 The Corporate Mission 2.3 Executive Officer and director 2.4 Facebook’s Shareholder 2.5 Facebook Milestone 2.6 Facebook Business 2.7 Competition 2.8 Revenues Stream 2.9 Facebook Market Opportunities 2.10 Facebook Strategy 2.11 Summary of Risk Factor Chapter III Facebook Financial Report 3.1 Consolidated Balance Sheets 3.2 Consolidated Statement of Income 3.3 Basic Earning Per Share 3.4 Pro-forma Earning Per Share 3.5 Consolidated Statement of Cash Flow 3.6 Consolidated Statement of Stockholder’s Equity 3.7 Dividend Policy Chapter IV Facebook Initial Public Offerings(IPOs) 4.1 IPOs Advantage 4.2 Preparing to go to Public 4.3 Facebook IPOs 4.4 Facebook IPOs Underwriting Company 4.5 Facebook IPOs Counsel Company 4.6 Facebook IPOs Financial Auditor 4.7 Why Facebook go to Public? 4.8 U.S. Stock Market 4.9 Which Market Facebook Plan to Listing? 4.10 Facebook IPOs Advantage and Opportunities Chapter V Conclusion Reference 1 2 3 3 3 4 5 7 7 8 9 10 10 12 14 15 16 17 18 19 21 22 23 24 27 27 28 29 30 33 34 36 CHAPTER I INTRODUCTION AND OBJECTIVES 1.1 Introduction Nowadays, firms objective generally relate...
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...Today I will talk about Facebook; it’s a very topical subject particularly since Facebook submit paperwork to regulators for an IPO, 1 month ago. But let’s start with a little part of history * Histoire «From Harvard dorm room to all Canadian and US University : Mark Zuckerberg, 28, founded Facebook while studying psychology at Harvard University. Zuckerberg had already developed a number of social-networking websites for fellow students, including Facemash, where you could rate people's attractiveness. In February 2004 Zuckerberg launched "The Facebook” with the help of Eduardo Saverin (business aspects), Dustin Moskovitz (programmer), Andrew McCollum (graphic artist). Within 24 hours, 1,200(one thousand two hundred) Harvard students had signed up, and after one month, over half of the undergraduate population had a profile. In March 2004, Facebook expanded to Stanford, Columbia, and Yale. It soon opened to the other Ivy League schools, Boston University, New York University, MIT, and gradually most universities in Canada and the United States. Facebook was then opened on September, 2006, to everyone of age 13 and older with a valid email address. * Chiffres clé As of February 2012, Facebook has more than 845 million active users and in average Facebook’s user increase by 100(one hundred) million each 120 (one hundred twenty) days. Facebook it’s 1 of every 5 of all page views on Internet. It’s 250 (two hundred fifty) million photos uploaded daily, 78 different languages...
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...Facebook announced its $5 billion IPO late Wednesday afternoon. But what is all the hype about? What is an IPO, how does it work, and will a publicly traded Facebook affect how we use the social network on a daily basis? Here's a quick guide. WHAT EXACTLY IS AN IPO? When a privately owned company makes an Initial Public Offering, it means they're moving to be publicly traded on the stock market for the first time. That means that anyone can buy stock in the company and own a portion of it. Ads By Google Online Trading Plus500®: APPL, Ebay, HP Commodities, No Fees! www.Plus500.no Bilforsikring -Sjekk pris Nemi Bilforsikring testvinner i VG. Sjekk din pris på bilforsikring her neminordvest.no/bilforsikring UK Fixed Income Aberdeen Managed UK Fixed Income Assets. Learn More. Aberdeen-Asset.NO Going public can help a company raise significant capital if a lot of people want to buy its stock. It also means that the company has to publicly disclose details about its finances, like its earnings, that it previously kept private. WHO DECIDES THE VALUE OF AN IPO? An investment bank determines how much money the company can expect to make on the stock market based on a number of factors, from the health of the economy to how popular the company's product is expected to be in the future. The initial valuation is always a bit of a gamble, since the stock has never been traded publicly before, and analysts can't look at past behavior to figure out how it should be...
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...The class action complaint alleges that Facebook failed to disclose to the investing public the material information that the company was experiencing, and anticipating, a significant drop in revenue due to an increase of users accessing Facebook through mobile devices. According to news reports, this lower revenue projection was selectively released by underwriter banks to only certain large investor clients and not included in the Registration Statement IPOs or initial public offerings are among the most exciting and closely followed events in the stock market. Although the excitement has cooled somewhat since the frenzy of the late 1990s when anyone with an idea that involved the word “Internet” could raise millions of dollars, IPOs still raise the market’s collective blood pressure. IPOs mark the transition of a company from a privately held to publicly held firm. Every incorporated business issues stock, however there are usually just one, two or a few stockholders, since most businesses start out small. These companies can’t sell stock to the general public beyond a small number of investors. If a company wants to raise a significant amount of capital without going into debt, one of the ways is to sell stock to the public. SEC Before a company can do this, it must register with the SEC (Securities and Exchange Commission) and prepare a public offering. This offering includes a prospectus and a number of other legal documents. The prospectus is the accounting...
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...BUSA 3134 Case Analysis Summer 2012 The focus of this analysis is the IPO of Facebook and subsequent decline in the stock price. Introduction – History of Facebook; what factors lead to the IPO. How the company expected the public/market to react to the IPO (stock price and trading, etc.) Body – What was the market reaction? What happened on the first day of trading and in the subsequent weeks (decline in market price, etc.) What items contributed to the loss of interest/loss of value in the stock (specific examples). Conclusion – What are the predictions for the future of Facebook and was it a good decision to go public. This is a suggested outline only. The analysis should provide insight into the company/owner and the decision to go public; what the company expected vs. what actually happened in the stock market; what does the future hold for the company/stock. INSTRUCTIONS: This assignment must be typed and a hard copy turned in on the due date. Be sure to save a copy of your paper just in case. The hard copy is due at the beginning of class on Monday, June 18, 2012. The first page of your paper should include the following information and NOTHING else: o Your name o The course and section o Semester o Title of Assignment Begin the paper on page 2. The paper should be double spaced to allow room for comments and edits. The paper should be no less than 2 pages in length (not including the cover page and works cited page). I expect...
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...help the company achieve a sustainable competitive advantage. In addition, passing the performance test indicates that a winning strategy produces strong company performance. Before IPO The primary mission and goal of Facebook CEO, Mr. Zuckerberg, before the company’s IPO, is to “connect the world digitally with Facebook” and increase its total membership (Rusli, 2014). Mr. Zuckerberg kept his primary mission of Facebook and cared less about the revenue. His strategy of Facebook at this point was to attract as many users as he would without placing more importance on how to make a lot of money. Facebook’s strategy before IPO is not a winning strategy. First of all, Facebook’s strategy at this point did not match well to the company’s best market opportunity of its initial public offering. Since Facebook wanted to go public, it needed a good performance to attract its potential investors and shareholders. The ability of gaining revenue is an important symbol and sign that potential investors will look for before deciding whether to invest. However, Mr. Zuckerberg’s primary mission of Facebook showed that “Facebook was not originally created to be a company” (Rusli, 2014), which would be harmful for the company to attract more potential investors. Therefore, Facebook’s strategy before IPO did not pass the fit test since this strategy didn't suit the company’s current situation at that point. Secondly, Facebook’s strategy could not help the company achieve a sustainable competitive...
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...years. Gene One aims at 40% growth in 36 months, thus, it needs an IPO to respond to the demand and meet their targets. The venture capital will allow Gene One to develop new technologies, increase their exposure, and strengthen the brand. The CEO, Don Ruiz, received board approval and is poised to implement his plan with the help of his senior executives. Similarly, other companies that have reached the growth of Gene One have used the prospects of an IPO to develop newer products, advance their technologies, and seek expansion of their brands. Facebook According to Facebook (2011) website, the company was created in February 2004 by Mark Zuckerberg, co-founders Dustin Moskovitz, Chris Hughes, and Eduardo Saverin from their Harvard dorm room, which in June of the same year moved to its new location in Palo Alto, California. In December 2004, the site had already reached one million users worldwide, from its initial start at the Harvard, Stanford, Columbia, and Yale dorms (Facebook, 2011). Its reach entered more than 800 college networks, thus, sparking media attention, bringing to Facebook its first venture capital investment of $12.7 million by Accel Partners (Facebook, 2011). With more than 5.5 million users by 2005, Zuckerberg raised another $27.5 million from Greylock Partners, Meritech Capital Partners and others to continue upgrading many features the site offered (2011). As it expanded Facebook reached 12 million users in 2006, 50 million in 2007, 100 million...
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...For the exclusive use of L. Wang, 2016. W12453 FACEBOOK, INC: THE INITIAL PUBLIC OFFERING (A) 1 Ken Mark wrote this case under the supervision of Professors Deborah Compeau, Craig Dunbar and Michael R. King solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality. This publication may not be transmitted, photocopied, digitized or otherwise reproduced in any form or by any means without the permission of the copyright holder. Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey Business School, Western University, London, Ontario, Canada, N6G 0N1; (t) 519.661.3208; (e) cases@ivey.ca; www.iveycases.com. Copyright © 2012, Richard Ivey School of Business Foundation Version: 2014-03-13 INTRODUCTION “The entire market is waiting for the emergence of Facebook as a publicly traded company,” said Jonathan McNeil, lead analyst at CXTechnology Fund (CXT), as he spoke to the fund’s investment committee on May 16, 2012. The highly anticipated pricing of the Facebook initial public offering (IPO) was underway, and in three hours, McNeil was scheduled to provide the lead underwriter, Morgan Stanley, with CXT’s final indication...
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...Individual assignment The social networking company Facebook, Inc. held its initial public offering (IPO) on May 18, 2012. The IPO was one of the biggest in technology, and the biggest in Internet history, with a peak market capitalization of over $104 billion. Facebook's founder and chief executive Mark Zuckerberg had for years been unwilling to take the company public and he resisted a number of buyout offers after Facebook's founding. The company did, however, accept private investments from companies--often technology firms. Question 1: What made Facebook go to public on May 18, 2012? Many reasons, what made Facebook going to public on May 18, 2012, but there are only 3 main reasons which are: * SEC Rule: The key reason Facebook is going public is because of an antiquated Securities and Exchange Commission rule from 1964 that says that any private company with more than 500 "shareholders of record" must adhere to the same financial disclosure requirements that public companies do. That means filing detailed quarterly and yearly financial reports, and dealing with all the scrutiny that comes with a powerful company opening its books. * Employees will breathe a sigh of relief: One big upside is that many employees can start cashing out, and the newfound wealth of a successful Facebook IPO would be widespread enough that it should be easy to spot. Given that, going public is important to help Facebook keep good people, although some newly rich always bolt (as happened...
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...1. How does Facebook make money? What are the value drivers of its business? What is its comparative advantage relative to other social networking companies? At the time of the IPO, Facebook possessed two revenue streams: advertising ($3.145B in 2011) and payments ($0.555B in 2011). The advertising business delivered ads to Facebooks users. Users uploaded an incredible wealth of information to Facebook, including their authentic identities, interests, and social connections, allowing advertisers to target their ads to an unprecedented degree. Further, all user uploaded information became the property of Facebook, granting them a monopoly on the data. This hyper-focused approach contrasted with those of other major technology driven advertising firms, like Google, whose value proposition is the ability to reach a significant percentage of all consumers using the internet. Facebook’s other revenue driver, online payments, consisted of in-game purchases of virtual goods for social games. In 2011, all of this revenue was generated via Zynga games. This business relied upon consumers using Facebook as their home for socially-connected online gaming. Given that payments represented a small portion of Facebook’s revenue, and that the advertising business was at the time more developed and predictable, valuing the company as an advertising company rather than a hybrid advertising and payments company seems appropriate. The comparative advantage of Facebook relative to other...
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...Facebook study p1 Facebook Study Case Elene Toussaint MAN 200.002 Prof. Best May 23, 2013 Facebook study p2 Facebook is the first largest social network on the web. Primarily focused on high school to college students and you can find friends/family members. Facebook has been gaining market share, and more significantly a supportive user base. Since their launch in February 2004 by Mark Zuckerberg Facebook is worth 141 billion with 1 billion of users. According to Floating Facebook “The value of friendship Facebook is likely to become a gargantuan company. That will bring risks as well as rewards” Feb 4th 2012, SAN FRANCISCO, started for Pre- Initial public offering (IPO) “Facebook has techies and venture capitalists been so aflutter”. In addition, the agreed settlement was for 1.2m shares which were worth $300m at Facebook's IPO in 2004. The company structure at IPO is CEO has a voting percentage of 57.9% of the board election which is simple to vote majority and rules of a controlled company. The ownership of Facebook is the Chief Executive Officer (CEO) Mark Zuckerberg and he owns 28.4% of Facebook. Facebook funding before IPO became into the photo which had millions of users, Friendster attempted to acquire the company for $10 million in mid 2004. However, Facebook turned down the offer and subsequently received $12.7 million in funding from Accel Partners. Sean Parker provided the introduction to their first investor, Peter Thiel, cofounder...
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...Project Group: LE THI THU HIEN LE THI NGOC YEN TRUONG TU QUYNH NGUYEN HONG CAM BINH Summer 2012 An overview Facebook was realized on February 4, 2004 by an American computer programmer and Internet entrepreneur- Mark Elliot Zuckerberg. Facebook has said it will be valued at up to $96bn (£59bn) when it sells shares to investors this month in a record-breaking flotation. The first investment from Peter Thiel was $500,000 into Facebook. Facebook has minted four billionaires: Mark Zuckerberg, Dustin Moskovitz, Eduardo Saverin and Sean Parker. The 27-year-old Zuckerberg's net worth was estimated at $17.5bn on the 2011 Forbes list of the wealthiest Americans. Moskovitz had a net worth of $3.5bn but pipped Zuckerberg for the title of world's youngest billionaire, being eight days younger. The Brazilian-born Saverin, who left Facebook early on after a falling-out with Zuckerberg, had a net worth of $2bn. Parker, the Napster co-founder who briefly served as Facebook's president, had a net worth of $2.1bn On November 15, 2010, Facebook announced it had acquired the domain name fb.com from the American Farm Bureau Federation for an undisclosed amount. On January 11, 2011, the Farm Bureau disclosed $8.5 million in "domain sales income", making the acquisition of FB.com one of the ten highest domain sales in history Nowadays, 1 in every 13 people on earth uses Facebook, more than 900m active users, with over 250 million of them who log in every day. The average user has about 130 friends...
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...How Do Social Media Companies Like Facebook and Twitter Make Money http://www.marketoracle.co.uk/Article42647.html Oct 11, 2013 - 12:44 PM GMT By: Money_Morning Tara Clarke writes: Over the last month we've seen Facebook's (Nasdaq: FB) dramatic share price rebound, Twitter's stock IPO announcement, and LinkedIn (NYSE: LNKD) stock on fire, but have you ever wondered... how do social media companies make money? To find out, we turned to Money Morning E-commerce Director Bret Holmes. Part of Holmes' job is to utilize web advertising via social media platforms to best market Money Morning. As a result, he's on top of what's going on inside of today's social media giants. Holmes said the key to unlocking value for social media companies is successful advertising models. "Social media companies are legitimate advertising websites, no different than, say, Google or Yahoo. The same way Google made its money is the same way Twitter and Facebook will make their money," Holmes explained. Web advertising is a growing market. In a 2013 Nielsen report, data showed that 89% of advertisers use free social media advertising, and 75% use paid social media advertising. The report also highlighted that 64% of advertisers expect to increase their paid social media advertising budgets over the course of 2013. That means a lot of opportunity for social media companies to make major money. The trick for social media companies looking to profit as ad platforms is to find the best way to...
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...Popular IPOs and Behavioural Finance 1 a) The IPO of Facebook Executive Summary This report examines and evaluates any observable behavioural finance phenomena during the recent Facebook Initial Public Offering. It starts by looking into Facebook’s background and what led up to the decision of turning the company public. It gives a brief explanation on the reasoning behind the decision and outlines the company’s main aims and focuses. It then gets into a few behavioural finance theories which help to explain the reasoning and decision-making process of investors purchasing Facebook stocks. Due to the very high anticipation of Facebook’s IPO and the company’s overall popularity, many investors may be over-confident or overestimate Facebook’s stock performance in the future. This may be damaging towards investors. However it is then concluded, that even though many investors decisions to purchase Facebook stocks may not be completely rational, they may still turn out to be beneficial for the investor. Introduction An IPO or Initial Public Offering, which can also be called Stock Market Launch, can be defined as a private company’s first sale of stock to the public. It is through this process that a private company is transformed into a public company. One of the most common reasons for going public is to raise expansion capital, which is to be used for the company’s growth. Behavioural Finance can be defined as a field of finance, which seeks to provide explanations as...
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...Since the movie “the Social Network,” Facebook had been privately controlled without any outside interference. The company’s reluctance to go out in the public did not last long and realized it had to go public for two reasons. As it grew bigger with over 800 million users and 500 shareholders, it had to release financial details to SEC as a requirement. Moreover, going to public was the best way to attract more investors to fund and make it even bigger. So the company finally decided to start its initial public offering (IPO). On May 18th 2012, the news of its IPO hyped many investors and stockholders. Nasdaq even put a huge digital billboard welcoming Facebook on board. The stock was opened up with high price of $38(5) and expected to trade really well through the first day, but that did not happen. The stock price did go up as high as $42 in its opening hours before it settled back toward $38. And the nightmare of falling stock price still goes on and some of the major unforeseen issues of Facebook appeared on a surface. Facebook had been the leading giant of social network, because it had the technology to make SNS website more user friendly than those of its competitors. Then the users started to switch their computers for mobile phones, ever since the IPhone and other smart phones emerged. Regardless of what was happening around, Mark Zuckerberg, the Facebook found, decided to keep improving on the computer-based Facebook, not improving on the mobile-based one. Before...
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