Question

1- Research the IPOs of 1 firm such as Groupon or Facebook. 2- Why did the...

1- Research the IPOs of 1 firm such as Groupon or Facebook.

2- Why did the firm choose an IPO at the point they did?

3- Was the IPO successful?

Homework Answers

Answer #1

1. We have selected the Facebook IPO.

2. Facebook- The main reason why Facebook went for an IPO is the number of shareholders in the company increased more than the threshold of 500 shareholders. As the number of shareholders crossed 500, Facebook decided to go public. Additionally in the same year of its IPO, 2012, there were several attempted made by big business including Yahoo!! to buy the business.

3. The IPO was a disappointment since the IPO failed to gain investors on the first day of trading. The Facebook stock closed only $0.23 (23 cents) above the issue price of $38 and also dropped by $3.82 from the peak on the first day of trading. There were also technical glitches on the NASDAQ on that day which led to added problems. Hence the IPO of Facebook was termed as a failure.

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