The Great Debate UK
from Paul Smalera:
Facebook shouldn't pay its users. Its users should pay to own Facebook.
“Facebook was not originally created to be a company,” founder Mark Zuckerberg wrote in his letter to investors announcing the IPO of his already hugely successful and profitable company. “It was built to accomplish a social mission — to make the world more open and connected.”
Facebook has succeeded wildly, despite internal admonitions that its “journey” is only 1 percent finished. Journalists have latched onto Zuckerberg’s statement that Facebook wants to “rewire” the way the world works. In a world of thousands of self-anointed “social media experts,” only Zuckerberg can claim to have basically invented what the world thinks of as social media. He has etched himself into the timeline of human innovation.
Pity then, that Zuckerberg hasn’t turned his talents or attention toward Facebook’s financial underpinnings. After all, an IPO? How ho-hum can he get? If Mark really wants to accomplish his social mission with Facebook, he should share the company’s ownership with the people who helped him create it. Not just his Harvard contemporaries. Not just the programmers. Not even just the venture capitalists.
I’m talking about us. All of us. The users. Facebook should be a user-owned, user-managed company, run for the benefit of users. For the Facebook, by the Facebook. The company should be a cooperative.
Skype looks like Silicon Valley's best hope for a blockbuster initial stock offering in 2010. With Facebook determined to stay private until next year, the former eBay orphan could steal the scene with a quick flip. Moreover, as a result of clarifying copyright issues and rewriting its code to attack the business market, the company may be worth twice its $2.75 billion price tag when eBay sold all but 30 percent of its stake last year.
The company already has 500 million users and made $48 million in the third quarter, its last before going private. That's good, but eBay wasn't a natural owner. Its core auction and payments businesses had little to do with managing a communications firm.
Russian initial public offerings are set for a comeback. Some $20 billion of Russian share sales are forecast this year, including dozens of IPOs. With plenty of options, investors should be able to drive a hard bargain.
Following a two-year lull in activity, bankers are excited at the prospect of a return to the heady days of 2006 and 2007, when Russian companies raised some $37 billion in 42 international share issues. Media group Profmedia plans to raise $500 million in April with a London listing, while iron ore miner Metalloinvest and coal miner SUEK are mulling billion-dollar IPOs in 2010.
Shanghai has had its first new issues disaster. XD Electric fell 1.4 percent on its first day of trading. That might not sound so bad, until you consider that Chinese initial public offerings in the last six months rose an average 80 percent on their first day. It might be a welcome sign that China's stock market investors are become more discerning.
XD Electric, the first IPO of 2010, suffered from two headwinds. One was a general market pull-back on fears China will begin monetary tightening. The Shanghai Composite Index has fallen 5 percent since the electrical equipment maker priced its shares a week ago, with heavy equipment firms down 8 percent. XD Electric was priced at the top of its indicated range, a 26 percent price-to-earnings premium to the market. Taking that into account, XD Electric's performance is not as bad as it looks.
There has only been one IPO completed on the Dubai Financial Market in the past 14 months and that was for construction contractor Drake & Scull in July last year.
Banks and insurers are looking for ways to bolster their capital, while having the flexibility to strike if there are acquisitions to be had on the cheap. To achieve these twin goals, Spain's Santander and now British insurer Aviva intend to float minority stakes in subsidiaries.
Aviva's chief executive Andrew Moss, who cut the insurer's dividend with its first-half result on Thursday, argued that it must be ready to take advantage of acquisition opportunities. Moss plans to float 25-30 percent of Delta Lloyd so that Aviva's 92 percent owned Dutch insurance unit can take part in the restructuring of the Benelux insurance market.
from The Great Debate:
The U.S. venture capital industry is desperate to repair the market for initial public stock offerings, but reviving the goose that once laid hundreds of golden eggs may not get very far.
The National Venture Capital Association (NVCA) this week set out its comprehensive plan to revive the IPO market and the heady investment returns that once fueled the tightly knit venture capital industry's success.