Zuckerberg Offers Twitter Advice In Regards To IPO


Few have seen the pratfalls and problems with a initial public offering in the technology sector like Mark Zuckerberg. It’s for this reason that Zuckerberg, in a rare display of humility, seems happy to share a bit of advice with Twitter as they plan to go public early next year.

Facebook’s troubles with underwriters

Beyond the troubles Facebook Inc (NASDAQ:FB) experienced with its underwriters, and a scandal that was never really labeled the scandal that it truly was, Facebook’s stock tanked out of the gate.

In an IPO that was referred to by many in the media as a “cultural milestone,” the offering was plagued by a number of problems immediately. Firstly, the NASDAQ OMX Group, Inc. (NASDAQ:NDAQ) suffered a computer malfunction during the opening hours, leading to tens of millions of dollars in trades being placed incorrectly. Underwriter Morgan Stanley (NYSE:MS) then compounded the problem, with many suggesting that the initial price was both too high and that the company had issued too many shares. Lastly, a number of Facebook executives were accused of alerting industry insiders to Facebook Inc (NASDAQ:FB)’s earnings before they were publicly reported. Each of these entities still face litigation over this matter.

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Zuckerberg resisted going public

In less than a month, the stock had lost over a quarter of its value and nearly half in the first three months following the initial offering. While this massive offering is finally coming good for many investors, it took quite some time—nearly as much time as Zuckerberg resisted going public.

Zuckerberg’s advice to Twitter? Don’t worry about it. Don’t be afraid.

“I’ve been very outspoken about staying private as long as possible,” Zuckerberg said in an interview at the TechCrunch Disrupt conference on Wednesday. “But in retrospect, I was too afraid of going public. I don’t think it’s necessary to do that.”

Zuckerberg’s offer refusal reason

That said, Zuckerberg did well to wait. The offers he refused would have cost him billions had he decided either to sell or go public earlier, especially since Facebook Inc (NASDAQ:FB) would have gone public prior to seeing the revenue it receives from mobile advertising.

“Having gone through a terrible first year, it made our company a lot stronger,” Zuckerberg said.

“As long as Twitter … focuses on what they’re doing, I think it’s wonderful, it’s great.”

“I’m kind of the person you would want to ask last on how to make a smooth IPO,” Zuckerberg said.

Updated on

While studying economics, Brendan found himself comfortably falling down the rabbit hole of restaurant work, ultimately opening a consulting business and working as a private wine buyer. On a whim, he moved to China, and in his first week following a triumphant pub quiz victory, he found himself bleeding on the floor based on his arrogance. The same man who put him there offered him a job lecturing for the University of Wales in various sister universities throughout the Middle Kingdom. While primarily lecturing in descriptive and comparative statistics, Brendan simultaneously earned an Msc in Banking and International Finance from the University of Wales-Bangor. He's presently doing something he hates, respecting French people. Well, two, his wife and her mother in the lovely town of Antigua, Guatemala. <i>To contact Brendan or give him an exclusive, please contact him at theflask@gmail.com</i>
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