Skip to main content

Facebook IPO - the new normal?

It used to be that an IPO was:
  1. The first major liquidity event for shareholders
  2. A means to raise growth capital
  3. The first time a company was "market priced" due to (1).
Because private market trading is now so prevalent, even small companies can achieve liquidity early in their lifecycle, with significant trading volume.  This also means that the companies will have fairly accurate market pricing.  If anything, they may be overpriced as the private trading system attracts earlier, higher risk investors.

The secondary markets also provide a means for companies to attract early growth capital...with a lot less hassle than an IPO.  Companies will probably stay on secondary markets until they are more mature, meaning more of the upside value will have been realized before they go public.

This is certainly the case with Facebook.  They are mature, they are profitable, and they raised a lot of their growth capital already.  The IPO (rumored to be raising $10B) is more about establishing a war chest so that they can compete with existing war chests (Google, Microsoft, etc.).  The evolution to the social web has just begun, so this is a smart move.




Popular posts from this blog

The Fourth R.

Reading, wRiting, aRithmetic, and algoRithms.  My wife and I were just brainstorming about this: how coding should be the next "basic" skill.  Of course, someone was ahead of us and posted this .  It is awesome to see Mozilla Hackasaurus referenced in this article.  It is a small world. In the early days of the printing press, scholars wrote the books; the press was simply used for production (see this article ).  As time went on, "average" people became familiar with the medium, and used it for their own messages.  We are at just that point with the Web.  Software Engineers write the code, and the Web distributes it.   Software Engineers are the algoRithm scholars of today.  They won't be for long.  Soon algoRithms will be taught starting in elementary school, along with the other three R's.
Read more

Connectome as a Book

Your Connectome is a map of your brain.  Every neuron, every synapse. I am only a few pages into Connectome, but was intrigued by a sentence: "Human DNA....has three billion letters....would be a million pages long if printed as a book."  The companion question, "How many pages for the Connectome?" might be answered later in the book, but I thought I would take a shot at it here. Here is the punchline: Your Connectome book is 6.7 million times longer than your DNA book. That human DNA is about a million pages is not too surprising, although it probably is not optimized. According to quora there are between 1500 and 1800 letters per page.  I am going to use round numbers, namely 2000.  Then, the 3x10^9 DNA letters would actually be 1.5 million pages.  But this is very wasteful.  Even using just ASCII we can encode four DNA letters per character, so the book should really only be about 400K pages.  And, this book is much more interesting; in...
Post a Comment
Read more