Monday, January 3, 2011

Why You Should Not Go Public

Following are the reasons why you should not go public:
  • Facebook
  • Groupon
  • Zynga
By that note I end this post. Common I’m joking. After all this is a blog post not a twitter status message. Back in the day releasing an IPO (Initial Public Offering) was a big thing. Still is but lot of new players have changed that. Yesterday The New York times reported that Goldman Sachs have invested $ 500 million based on the $ 50 Billion evaluation. $ 50 Billion evaluation !!!! Can you believe that ? Of course you can believe that if you have been following the wall street for past few months. I mean if a company like Groupon can reject Google’s $ 6 billion what do you expect from Facebook. Instead of buying Groupon Google can build there own groupon for less than 100 million, heck I will make them a Groupon clone for less than a million dollars. (Google if you are reading this, be smart about it :) ). But building Groupon wont give them members, that is like the supreme factor for any online service. That is the same reason why Microsoft Bing will never be able to beat Google, we are just lazy to give another search engine a try no matter how great it is. Zynga is also sailing on the same being private boat. You know Zynga right, makers of the infamous FarmVille. I think this game is the stupidest thing I have ever seen but what do I know ? Millions of people play it, including lot of my friends. Zynga like Facebook and Groupon would like to be private (for now). Typically a company wants to go private when they need money and they can bear the SEC (Securities and Exchange Commission) rules, declarations and finally visits. But these companies have got the Russians to pay for their business and they don't need the public money. And with companies like Goldman Sachs poring in, the private sector is getting better day by day. But evaluations like $ 50 billion is pissing SEC off. SEC is pretty sure that these companies have something to hide, The Securities Exchange Commission is looking into the trading of Facebook in the private market. The SEC inquiry includes transactions in Zynga, Twitter and LinkedIn shares within the same private markets that Facebook stakes have exchanged hands, you know the Russians. I dont think the SEC investigation would do anything wrong, if it have been the European Union something may happen. So be smart about it, if you have your own company want to go public or want to sell it to a company like Google, you may loose a very valuable opportunity to write “I’m the CEO bitch” on your business card.

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