Facebook

Topics: Facebook, Finance, Stock Pages: 10 (2225 words) Published: November 4, 2014
Table of Content

Executive Summary…………………………………………………………PG3

Introduction………………………………………………………………PG 4

Recent history of the company………………………………………….PG 5

Explanation of Source of Finance………………………………………PG6-7

Firms sources of finance/Capital Structure of the firm………………...PG 7-8

Reason for floatation………………………………………………..….PG9

Implications of the floatation for the firm……………………………...PG8-10

Performance of the firms shares since floatation…………………….…PG11

Future prospects for the firm……………………………………………PG12

Recommendations as to future financing…………………………………..

Conclusion…………………………………………………………………….

References……………………………………………………………………..



EXECUTIVE SUMMARY

A firm that has been floating on the stock exchange has been selected and evaluated and the firm I have chosen was Facebook. In my report I have included the recent history of Facebook as to how the social networking site started and the developments from the introduction until recently.

I furthermore went on to evaluate the source of finance with a brief explanation as to what source of finance is and the different type of sources available to business i.e. Short term , medium term and long term. This explains the type of finance business need starting from day to day transactions to long term purchasing of assets and investments.

After my understanding of what sources of finance are, I done some research on Facebooks source of finance and came to a conclusion that the firms sources of finance is long term source of finance as they earn money through shares(IPO).

The reason for Facebooks floatation was simply because at the time they decide to go public the firm was already valued as one of the top companies around, however even though the firm was highly valued there was still negative stories about the firm.

Facebook continues to grow and to try and keep the 200 million users entertain there are now talks of a Facebook phone that is due to be released this year.�

INTRODUCTION

I am required to select a firm that has floated on the stock exchange in the last 4 years analyse and critically evaluate the firms decision to go public. The firm I chose was Facebook and in my report I will be discussing the following about the firm.

Recent history of the company

The firms sources of finance/ Capital structure of the firm

Reason for flotation

Implications of the flotation

Performance of shares since flotation

Future prospects for the firm

Recommendations as to the future financing



ABOUT FACEBOOK

Facebook is a popular social networking website whose name originated as a nickname of directories handed out to university students that aided in them getting to know their fellow students.

The social networking site was invented by Harvard computer science student Mark Zuckerberg, along with a few class mates. Facebook officially started off in October 2003 when Zuckerberg launched "Facemash.com" to allow visitors to compare pictures of two students and say who's hot and who's not. The website became popular as people enjoyed going on the internet and checking out pictures of their friends.

In January 2004 an article in the Harvard Crimson stated that Zuckerberg registered the Facebook.com domain as he was now inspired by the success of Facemash. Shortly after the launch of Facebook the website eventually grew as it was now discovered by Sean Parker (Former Co Founder of Napster) who informally advised the student on what to do, and by June 2004 Facebook received its first private investment from Peter Theil [http://www.youtube.com/watch?v=ROrUea0gLlY], the founder of PayPal who gave $500 000 in exchange for 10.2% of the company. Sean Parker later became president of the newly incorporated company Facebook.

Facebooks domination continued to grow until it became the second most visited web property online. In August 2009 Facebook acquired the real time new aggregator site friends feed and in 2012...
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