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Facebook and Why It Won’t Go Public

June 16, 2011 by Blair Stover

When a company is worth near 50 billion dollars you would think people would want to have their hands in all that wealth, and they do.  But Facebook is yet to go public and people looking to invest in the ever-growing corporation are being left out of one of the most successful businesses of the decade.  The question is why, why hasn’t Mark Zuckerberg gone public with Facebook?

The truth is that Zuckerberg is very likely to fight going public for as long as he can.  This may be telling us something about the financial situation Facebook is in at the moment.  While the corporation doesn’t have to disclose financial information, as they currently are not over the 500 shareholders mark, many believe that Facebook should be ordered to disclose their financial information now.

Zuckerberg is simply waiting for the right time.  There will come a time when Zuckerberg wants to cash in on the billions waiting for him.  Should we take into consideration that in a very successful film release this year, The Social Network, audiences were led to believe that Zuckerberg doesn’t care too much about money?  If anything truthful can be taken from the movie as truth it may be that Zuckerberg likes having control of his company.  Once Facebook goes public he will have to relinquish some of that control.

We know that Facebook is growing into a money-making powerhouse simply because of the latest deal that the company has been involved in.  Goldman Sachs has apparently paid Facebook roughly 450 million dollars and has promised to invest a billion dollars in the company in the future.  That is a lot of money.  Now think about if Facebook gets ten offers this year to do the same thing.  That’s over 10 billion dollars in growth over the next year.  If Facebook is currently worth 50 billion dollars then that equates to a 20% growth in one year, which is mind blowing in the business community.

To Mark Zuckerberg’s credit there are some problems within the stock exchange.  The regulation system was set up in the 1930’s so we can’t expect it to be prepared to handle a company as large as Facebook has become very smoothly.  Facebook may also be worried by the fact the stock market isn’t necessarily run by investors but computers looking for patterns.  The bottom line is that Zuckerberg is resisting the pull to go public; so we know that Facebook won’t be going public until the man behind the Facebook curtain is ready to.


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