Now that the post-float hubbub has passed, it is clear that Facebook priced its initial public offering too aggressively. I don’t know if it was a quest for the bragging rights it felt went with a $100bn-plus valuation, but there was little or no consideration for the consequences. Instead of pricing the stock with some upward room for new investors, they let everyone who had invested earlier take the maximum out and cash in. Faced with high earnings expectations, Facebook will need to do more with a business model that is suspect at best. And now they are doing it with a full boat of shareholders who are underwater on their investment.
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