IPO Advisory Group: Is Facebooks IPO Fiasco Really A Good Thing?

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IPO News & Information website analyzes Facebooks much controversial Initial Public Offering.

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The IPO Blog has recently added a new blog post regarding the recent Facebook IPO. They ask the question: is the Facebook IPO fiasco really a good thing? They agree that there was “justifiable upset” in regards to alleged insider information being withheld from general investors. This coupled with the falling stock price has cost investors considerable earnings. These facts have left some investors skeptical and cynical, even those not directly involved in the deal.

But the IPO News & Information Website asserts that the overall effect on the market will be positive. The media coverage of the Facebook IPO, coupled with other recent social media IPOs has garnered amazing publicity about the going public process. This in turn has generated great interest in both the stock market and US economy. Common wisdom states that the Facebook IPO was more a case of poor execution rather than the entire IPO process being fatally flawed. “Future IPOs will be more thoroughly scrutinized to provide a more realistic outlook of a company’s financial future” stated a company spokesman. “This in turn will lead to a better informed investor base less likely to be taken in by the hype of a familiar brand going public.”

The IPO News & Information spokesperson said, “In the short term the Facebook fallout has had a cooling effect on IPOs in general, putting some on hold until company valuations rebound from the likely overcorrection of issuers and underwriters. In the long term it will create a stronger market as future IPOs do make the grade.”

The IPO News & Information Website noted that despite the investor backlash Facebook was successful in raising substantial capital that allows them to stay competitive with Apple, Google and Twitter. They also touched on a rarely discussed aspect: nearly half of the IPOs from 2012 are currently trading below their initial offering price. “This highlights the fact that there are alternative methods to going public. While an IPO makes a splash, depending on a company’s earnings and revenues they may be better served by a DPO (Direct Public Offering), PPM (Private Placement Memorandum), or Regulation D . Bottom line; going public, with or without an IPO, is still a viable option for a company seeking to raise capital. While there are no guarantees of raising capital, a company that’s able to properly illustrate their future growth potential and marketability can still capitalize on going public.”

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