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post #61 of 87
Quote:
Originally Posted by Saturdays View Post

no not confusing, just nit picking the actual rule. Companies can file with SEC their paperwork and that makes them public - because then you can look it up and pull out the information, a private company does not have to do that. A public company does not have to File an IPO, but generally at that point many have, like Google and upcoming like Facebook, because partially they say 'why not? we are public anyway in terms of disclosing information'. So they have a choice to not file for IPO, but still must file their financial docs

what you're saying doesn't make much sense.

Firstly, when most people think "public company" they think publicly traded. Secondly, no company that doesn't have to would release their financials. That is damn near the biggest benefit of being private.

At some point, depending on the offerings you do make and the number of investors you have, you will have to file registration statements.
post #62 of 87
Quote:
Originally Posted by patrickBOOTH View Post

But that is not even half of what the current value is believed to be.

Sorry for my late response. I completely agree, and stated it previously in this thread that even though some of these companies have value, they are overvalued, many unbelievably over valued.
Quote:
Another thing I don't understand is a lot of these tech companies need for so much capital dollars. It is not like they are a raiload, power plant, etc. What is the need for these dollars, and why pay the cost for all of this capital and dillute your own profits? Sure they need servers, but relative to cash infusions these companies get, servers are very cheap.

Normally for tech it works like this (as I understand it, please someone correct me if my info is wrong):

1) Come up with idea
2) Start Co
3) Get start-up funds
4) Hire people
5) Ball gets rolling, but normally stat-up funds aren't enough (myriad of reasons, normally bad planning and / or due diligence)
6) Get more funds, normally from a larger investor(s) with deeper pockets
7) Investors normally reorganize finances of Co, amongst other things
8) Once the company has been established for a while: figure out how to monazite and make a profit.

Sound really odd because step 8 should be done in conjunction with step 1? It is. IDK why tech is normally done this way, but it is. So, they burn through a lot of money at the beginning (and often need several capital infusions) before they even come up with how to actually generate profit, to say nothing of actually being able to generate profit.
post #63 of 87
Quote:
Originally Posted by imageWIS View Post

Quote:
Originally Posted by patrickBOOTH View Post

But that is not even half of what the current value is believed to be.

Sorry for my late response. I completely agree, and stated it previously in this thread that even though some of these companies have value, they are overvalued, many unbelievably over valued.
Quote:
Another thing I don't understand is a lot of these tech companies need for so much capital dollars. It is not like they are a raiload, power plant, etc. What is the need for these dollars, and why pay the cost for all of this capital and dillute your own profits? Sure they need servers, but relative to cash infusions these companies get, servers are very cheap.

Normally for tech it works like this (as I understand it, please someone correct me if my info is wrong):

1) Come up with idea
2) Start Co
3) Get start-up funds
4) Hire people
5) Ball gets rolling, but normally stat-up funds aren't enough (myriad of reasons, normally bad planning and / or due diligence)
6) Get more funds, normally from a larger investor(s) with deeper pockets
7) Investors normally reorganize finances of Co, amongst other things
8) Once the company has been established for a while: figure out how to monazite and make a profit.

Sound really odd because step 8 should be done in conjunction with step 1? It is. IDK why tech is normally done this way, but it is. So, they burn through a lot of money at the beginning (and often need several capital infusions) before they even come up with how to actually generate profit, to say nothing of actually being able to generate profit.

I am not trying to offend you, but from my country bumpkin yet cynical point of view, I have always felt this way about most businesses and companies that aren't either making things or selling material things (food, cars, shoes etc).
post #64 of 87
Quote:
Originally Posted by Saturdays View Post

no not confusing, just nit picking the actual rule. Companies can file with SEC their paperwork and that makes them public - because then you can look it up and pull out the information, a private company does not have to do that. A public company does not have to File an IPO, but generally at that point many have, like Google and upcoming like Facebook, because partially they say 'why not? we are public anyway in terms of disclosing information'. So they have a choice to not file for IPO, but still must file their financial docs

This is being an SEC filer. Most people think publicly traded means their common stock is freely traded over an exchange in which they have to file an IPO.
post #65 of 87
Quote:
Originally Posted by bringusingoodale View Post

I am not trying to offend you, but from my country bumpkin yet cynical point of view, I have always felt this way about most businesses and companies that aren't either making things or selling material things (food, cars, shoes etc).

Why would I be offended? I was only stating the tech start-up process... I am not the originator of the process, nor do I, as clearly pointed out, agree with it.
post #66 of 87
Quote:
Originally Posted by Saturdays View Post

Its not necessary to go public and hold an IPO though, yes go public with their financial statements and etc.. but nothing requires them to have to file for an IPO.
Quote:
Originally Posted by bringusingoodale View Post

I am not trying to offend you, but from my country bumpkin yet cynical point of view, I have always felt this way about most businesses and companies that aren't either making things or selling material things (food, cars, shoes etc).

=_= leasing out the hosts of former diseased tech companies. Then wasting the rest of the money offering free breakfast, lunch and dinner to employees and the friends and family they bring tongue.gif
post #67 of 87
Quote:
Originally Posted by Quadcammer View Post

what you're saying doesn't make much sense.
Firstly, when most people think "public company" they think publicly traded. Secondly, no company that doesn't have to would release their financials. That is damn near the biggest benefit of being private.
At some point, depending on the offerings you do make and the number of investors you have, you will have to file registration statements.
Quote:
Originally Posted by Texasmade View Post

This is being an SEC filer. Most people think publicly traded means their common stock is freely traded over an exchange in which they have to file an IPO.

Thats the point, geez. Once a company reaches 500 employees and over $10M -> have to file their financials with SEC -> hence making them public.

This is what Twitter, Gilt and a few other companies are trying to avoid. They actually have been backing a bill that would increase the limit from 500 employees to 1500 employees.

You have 90 days to file with the SEC, per their rules after the end of the quarter in which you fall into the rule - this is what Facebook, and at one point Google fell into.

So what I was saying is that Facebook does NOT need to have an IPO, they can choose not to offer shares publicly - but they MUST offer their financial statements to the SEC -> hence going public, but not publicly trading.

That is why you can view Chryslers information on sec.gov - Chrysler is a private company and has over 500 employees and over $10M in assets.

Per the SEC:
Quote:
V. If My Company Becomes Public, What Disclosures Must I Regularly Make?

Your company can become "public" in one of two ways - by issuing securities in an offering registered under the Securities Act or by registering the company's outstanding securities under Exchange Act requirements. Both types of registration trigger ongoing reporting obligations for your company. In some cases, the Exchange Act also subjects your company's officers, directors and significant shareholders to reporting requirements. Let's discuss these requirements individually.

Reporting obligations because of Securities Act registration

Once the staff declares your company's Securities Act registration statement effective, the Exchange Act requires you to file reports with the SEC. The obligation to file reports continues at least through the end of the fiscal year in which your registration statement becomes effective. After that, you are required to continue reporting unless you satisfy the following "thresholds," in which case your filing obligations are suspended:

your company has fewer than 300 shareholders of the class of securities offered; or
your company has fewer than 500 shareholders of the class of securities offered and less than $10 million in total assets for each of its last three fiscal years.
If your company is subject to the reporting requirements, it must file information with the SEC about:

its operations;
its officers, directors, and certain shareholders, including salary, various fringe benefits, and transactions between the company and management;
the financial condition of the business, including financial statements audited by an independent certified public accountant; and
its competitive position and material terms of contracts or lease agreements.
All of this information becomes publicly available when you file your reports with the SEC. As is true with Securities Act filings, small business issuers may choose to use small business alternative forms and Regulation S-B for registration and reporting under the Exchange Act.
post #68 of 87
Quote:
Originally Posted by bringusingoodale View Post

I am not trying to offend you, but from my country bumpkin yet cynical point of view, I have always felt this way about most businesses and companies that aren't either making things or selling material things (food, cars, shoes etc).

It is very hard to put a value on a service, experience, or something that is not easily tangible. If you really wanted to get technical the value of Facebook should be a function of the current and future marketing budgets of all who advertise on Facebook.
post #69 of 87
Quote:
Originally Posted by patrickBOOTH View Post

It is very hard to put a value on a service, experience, or something that is not easily tangible. If you really wanted to get technical the value of Facebook should be a function of the current and future marketing budgets of all who advertise on Facebook.

I haven't pored too deeply into facebook's financials yet, but I'd wager that they have a fuckload of goodwill on their balance sheet.
post #70 of 87
Zucky's letter in the IPO they filed, lengthy read:
Warning: Spoiler! (Click to show)
Facebook was not originally created to be a company. It was built to accomplish a social mission - to make the world more open and connected.

We think it's important that everyone who invests in Facebook understands what this mission means to us, how we make decisions and why we do the things we do. I will try to outline our approach in this letter.

At Facebook, we're inspired by technologies that have revolutionized how people spread and consume information. We often talk about inventions like the printing press and the television - by simply making communication more efficient, they led to a complete transformation of many important parts of society. They gave more people a voice. They encouraged progress. They changed the way society was organized. They brought us closer together.

Today, our society has reached another tipping point. We live at a moment when the majority of people in the world have access to the internet or mobile phones - the raw tools necessary to start sharing what they're thinking, feeling and doing with whomever they want. Facebook aspires to build the services that give people the power to share and help them once again transform many of our core institutions and industries.

There is a huge need and a huge opportunity to get everyone in the world connected, to give everyone a voice and to help transform society for the future. The scale of the technology and infrastructure that must be built is unprecedented, and we believe this is the most important problem we can focus on.

We hope to strengthen how people relate to each other.

Even if our mission sounds big, it starts small - with the relationship between two people.

Personal relationships are the fundamental unit of our society. Relationships are how we discover new ideas, understand our world and ultimately derive long-term happiness.

At Facebook, we build tools to help people connect with the people they want and share what they want, and by doing this we are extending people's capacity to build and maintain relationships.

People sharing more - even if just with their close friends or families - creates a more open culture and leads to a better understanding of the lives and perspectives of others. We believe that this creates a greater number of stronger relationships between people, and that it helps people get exposed to a greater number of diverse perspectives.

By helping people form these connections, we hope to rewire the way people spread and consume information. We think the world's information infrastructure should resemble the social graph - a network built from the bottom up or peer-to-peer, rather than the monolithic, top-down structure that has existed to date. We also believe that giving people control over what they share is a fundamental principle of this rewiring.

We have already helped more than 800 million people map out more than 100 billion connections so far, and our goal is to help this rewiring accelerate.

We hope to improve how people connect to businesses and the economy.

We think a more open and connected world will help create a stronger economy with more authentic businesses that build better products and services.

As people share more, they have access to more opinions from the people they trust about the products and services they use. This makes it easier to discover the best products and improve the quality and efficiency of their lives.

One result of making it easier to find better products is that businesses will be rewarded for building better products - ones that are personalized and designed around people. We have found that products that are "social by design" tend to be more engaging than their traditional counterparts, and we look forward to seeing more of the world's products move in this direction.

Our developer platform has already enabled hundreds of thousands of businesses to build higher-quality and more social products. We have seen disruptive new approaches in industries like games, music and news, and we expect to see similar disruption in more industries by new approaches that are social by design.

In addition to building better products, a more open world will also encourage businesses to engage with their customers directly and authentically. More than four million businesses have Pages on Facebook that they use to have a dialogue with their customers. We expect this trend to grow as well.

We hope to change how people relate to their governments and social institutions.

We believe building tools to help people share can bring a more honest and transparent dialogue around government that could lead to more direct empowerment of people, more accountability for officials and better solutions to some of the biggest problems of our time.

By giving people the power to share, we are starting to see people make their voices heard on a different scale from what has historically been possible. These voices will increase in number and volume. They cannot be ignored. Over time, we expect governments will become more responsive to issues and concerns raised directly by all their people rather than through intermediaries controlled by a select few.

Through this process, we believe that leaders will emerge across all countries who are pro-internet and fight for the rights of their people, including the right to share what they want and the right to access all information that people want to share with them.

Finally, as more of the economy moves towards higher-quality products that are personalized, we also expect to see the emergence of new services that are social by design to address the large worldwide problems we face in job creation, education and health care. We look forward to doing what we can to help this progress.

Our Mission and Our Business

As I said above, Facebook was not originally founded to be a company. We've always cared primarily about our social mission, the services we're building and the people who use them. This is a different approach for a public company to take, so I want to explain why I think it works.

I started off by writing the first version of Facebook myself because it was something I wanted to exist. Since then, most of the ideas and code that have gone into Facebook have come from the great people we've attracted to our team.

Most great people care primarily about building and being a part of great things, but they also want to make money. Through the process of building a team - and also building a developer community, advertising market and investor base - I've developed a deep appreciation for how building a strong company with a strong economic engine and strong growth can be the best way to align many people to solve important problems.

Simply put: we don't build services to make money; we make money to build better services.

And we think this is a good way to build something. These days I think more and more people want to use services from companies that believe in something beyond simply maximizing profits.

By focusing on our mission and building great services, we believe we will create the most value for our shareholders and partners over the long term - and this in turn will enable us to keep attracting the best people and building more great services. We don't wake up in the morning with the primary goal of making money, but we understand that the best way to achieve our mission is to build a strong and valuable company.

This is how we think about our IPO as well. We're going public for our employees and our investors. We made a commitment to them when we gave them equity that we'd work hard to make it worth a lot and make it liquid, and this IPO is fulfilling our commitment. As we become a public company, we're making a similar commitment to our new investors and we will work just as hard to fulfill it.

The Hacker Way

As part of building a strong company, we work hard at making Facebook the best place for great people to have a big impact on the world and learn from other great people. We have cultivated a unique culture and management approach that we call the Hacker Way.

The word "hacker" has an unfairly negative connotation from being portrayed in the media as people who break into computers. In reality, hacking just means building something quickly or testing the boundaries of what can be done. Like most things, it can be used for good or bad, but the vast majority of hackers I've met tend to be idealistic people who want to have a positive impact on the world.

The Hacker Way is an approach to building that involves continuous improvement and iteration. Hackers believe that something can always be better, and that nothing is ever complete. They just have to go fix it - often in the face of people who say it's impossible or are content with the status quo.

Hackers try to build the best services over the long term by quickly releasing and learning from smaller iterations rather than trying to get everything right all at once. To support this, we have built a testing framework that at any given time can try out thousands of versions of Facebook. We have the words "Done is better than perfect" painted on our walls to remind ourselves to always keep shipping.

Hacking is also an inherently hands-on and active discipline. Instead of debating for days whether a new idea is possible or what the best way to build something is, hackers would rather just prototype something and see what works. There's a hacker mantra that you'll hear a lot around Facebook offices: "Code wins arguments."

Hacker culture is also extremely open and meritocratic. Hackers believe that the best idea and implementation should always win - not the person who is best at lobbying for an idea or the person who manages the most people.

To encourage this approach, every few months we have a hackathon, where everyone builds prototypes for new ideas they have. At the end, the whole team gets together and looks at everything that has been built. Many of our most successful products came out of hackathons, including Timeline, chat, video, our mobile development framework and some of our most important infrastructure like the HipHop compiler.

To make sure all our engineers share this approach, we require all new engineers - even managers whose primary job will not be to write code - to go through a program called Bootcamp where they learn our codebase, our tools and our approach. There are a lot of folks in the industry who manage engineers and don't want to code themselves, but the type of hands-on people we're looking for are willing and able to go through Bootcamp.

The examples above all relate to engineering, but we have distilled these principles into five core values for how we run Facebook:

Focus on Impact

If we want to have the biggest impact, the best way to do this is to make sure we always focus on solving the most important problems. It sounds simple, but we think most companies do this poorly and waste a lot of time. We expect everyone at Facebook to be good at finding the biggest problems to work on.

Move Fast

Moving fast enables us to build more things and learn faster. However, as most companies grow, they slow down too much because they're more afraid of making mistakes than they are of losing opportunities by moving too slowly. We have a saying: "Move fast and break things." The idea is that if you never break anything, you're probably not moving fast enough.

Be Bold

Building great things means taking risks. This can be scary and prevents most companies from doing the bold things they should. However, in a world that's changing so quickly, you're guaranteed to fail if you don't take any risks. We have another saying: "The riskiest thing is to take no risks." We encourage everyone to make bold decisions, even if that means being wrong some of the time.

Be Open

We believe that a more open world is a better world because people with more information can make better decisions and have a greater impact. That goes for running our company as well. We work hard to make sure everyone at Facebook has access to as much information as possible about every part of the company so they can make the best decisions and have the greatest impact.

Build Social Value

Once again, Facebook exists to make the world more open and connected, and not just to build a company. We expect everyone at Facebook to focus every day on how to build real value for the world in everything they do.

Thanks for taking the time to read this letter. We believe that we have an opportunity to have an important impact on the world and build a lasting company in the process. I look forward to building something great together.

Mark Zuckerberg
$5 Billion dollar IPO filed, probably going to be selling the shares in May

2011 Profits were $1B of $3.7B in Revenue. Zynga = 12% of its Revenue
post #71 of 87
Quote:
Originally Posted by Saturdays View Post

Thats the point, geez. Once a company reaches 500 employees and over $10M -> have to file their financials with SEC -> hence making them public.
This is what Twitter, Gilt and a few other companies are trying to avoid. They actually have been backing a bill that would increase the limit from 500 employees to 1500 employees.
You have 90 days to file with the SEC, per their rules after the end of the quarter in which you fall into the rule - this is what Facebook, and at one point Google fell into.
So what I was saying is that Facebook does NOT need to have an IPO, they can choose not to offer shares publicly - but they MUST offer their financial statements to the SEC -> hence going public, but not publicly trading.
That is why you can view Chryslers information on sec.gov - Chrysler is a private company and has over 500 employees and over $10M in assets.
Per the SEC:
Quote:
V. If My Company Becomes Public, What Disclosures Must I Regularly Make?
Your company can become "public" in one of two ways - by issuing securities in an offering registered under the Securities Act or by registering the company's outstanding securities under Exchange Act requirements. Both types of registration trigger ongoing reporting obligations for your company. In some cases, the Exchange Act also subjects your company's officers, directors and significant shareholders to reporting requirements. Let's discuss these requirements individually.
Reporting obligations because of Securities Act registration
Once the staff declares your company's Securities Act registration statement effective, the Exchange Act requires you to file reports with the SEC. The obligation to file reports continues at least through the end of the fiscal year in which your registration statement becomes effective. After that, you are required to continue reporting unless you satisfy the following "thresholds," in which case your filing obligations are suspended:
your company has fewer than 300 shareholders of the class of securities offered; or
your company has fewer than 500 shareholders of the class of securities offered and less than $10 million in total assets for each of its last three fiscal years.
If your company is subject to the reporting requirements, it must file information with the SEC about:
its operations;
its officers, directors, and certain shareholders, including salary, various fringe benefits, and transactions between the company and management;
the financial condition of the business, including financial statements audited by an independent certified public accountant; and
its competitive position and material terms of contracts or lease agreements.
All of this information becomes publicly available when you file your reports with the SEC. As is true with Securities Act filings, small business issuers may choose to use small business alternative forms and Regulation S-B for registration and reporting under the Exchange Act.

Once again, that does not make it public
post #72 of 87
Quote:
Originally Posted by Quadcammer View Post

Once again, that does not make it public

I never said it was a publicly traded company, but its company financials are made public. According to the SEC that is what is required once you fall under that rule. I'm not confusing a publicly traded company with a company whose financials are made public because of that rule. In a sense the company is public because the public can view their financials, but they are still privately held in terms of shares of ownership.

We are all loosely using the term public, I am simply stating that Facebook may not have an option to stay private because of this rule that Booth introduced me too. Upon further research I realized that Facebook does not even have to file an IPO because of that rule only file its reports with the SEC, and hence making it available for the public to view.

Not too hard to understand. My example of Chrysler, a privately held company, that files its reports to the SEC is exactly what I mean. Its financials are public, but its privately held. If Chrysler had 400 employees - then they would be privately held and not have to file there reports to the SEC, thus no public reports.

Again, really not too hard to understand the difference between a company that has to file publicly, and a company that shares trade publicly.
post #73 of 87
Quote:
Originally Posted by Saturdays View Post

I never said it was a publicly traded company, but its company financials are made public. According to the SEC that is what is required once you fall under that rule. I'm not confusing a publicly traded company with a company whose financials are made public because of that rule. In a sense the company is public because the public can view their financials, but they are still privately held in terms of shares of ownership.
We are all loosely using the term public, I am simply stating that Facebook may not have an option to stay private because of this rule that Booth introduced me too. Upon further research I realized that Facebook does not even have to file an IPO because of that rule only file its reports with the SEC, and hence making it available for the public to view.
Not too hard to understand. My example of Chrysler, a privately held company, that files its reports to the SEC is exactly what I mean. Its financials are public, but its privately held. If Chrysler had 400 employees - then they would be privately held and not have to file there reports to the SEC, thus no public reports.
Again, really not too hard to understand the difference between a company that has to file publicly, and a company that shares trade publicly.

We're essentially arguing the meaning of public. You're saying public and I'm saying SEC filer but we're both talking about the same thing. But in order to be publicly traded you have to file an IPO except for I think pink sheet listings.

Facebook filed their IPO probably to make it easier for people to sell their shares or monetize their assets. Also being publicly traded gives more investors a chance to buy the stock which should also drive up the price.
post #74 of 87
Quote:
Originally Posted by Texasmade View Post

We're essentially arguing the meaning of public. You're saying public and I'm saying SEC filer but we're both talking about the same thing. But in order to be publicly traded you have to file an IPO except for I think pink sheet listings.
Facebook filed their IPO probably to make it easier for people to sell their shares or monetize their assets. Also being publicly traded gives more investors a chance to buy the stock which should also drive up the price.

I bolded the operative word.
post #75 of 87
Quote:
Originally Posted by Texasmade View Post

We're essentially arguing the meaning of public. You're saying public and I'm saying SEC filer but we're both talking about the same thing. But in order to be publicly traded you have to file an IPO except for I think pink sheet listings.
Facebook filed their IPO probably to make it easier for people to sell their shares or monetize their assets. Also being publicly traded gives more investors a chance to buy the stock which should also drive up the price.

Yup, I agree.
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