Facebook: Why the IPO?

February 2, 2012

“Given that it doesn’t need capital and doesn’t want shareholders to get in the way of its autocratic founder, why the IPO? Apart from meeting US regulations for a private company to go public when it gains more than 500 investors, Facebook’s motivation is clear: to gratify its venture capital investors and employees.”

“That’s right. Its sole tangible purpose for the IPO proceeds is to meet a tax obligation that will be triggered by going public. Welcome to the Catch-22 world of the venture capital liquidity event.”

John Gapper on Facebook’s IPO, FT, Feb. 2 2012

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