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To What Extent was Facebook 'Right' to Become a PLC?

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To What Extent was Facebook 'Right' to Become a PLC?
To what extent was Facebook 'right' to become a PLC

Facebook is a social networking service, which was controversially started in the United Sates by Mark Zuckerberg in 2004. The website's membership was initially limited to Harvard students, but was expanded to other universities, and gradually globalization. In 2012 Mark Zuckerberg decide to convert the structure of Facebook from a Private Limited Company to Public Limited Company. Facebook values shares at £24 each, and Facebook shares began trading in New York on 18th of May 2012. It was estimated Facebook would be worth £66 billion at this price. The following essay will analyse whether Facebook was right and if it has benefited since changing between a private limited company to public limited company.

Mark Zuckerberg fought Facebook going public as he thought keeping the company private was the best way to keep Facebook nimble and build the business. Although many argued that Facebook was right to go public, and as a result of going public they were able to increase funding which enabled them to grow and improve the social networking site.

After going public Facebook’s Initial Public Offering was a staggering $16 billion, the hasty amount of money readily available allowed them to acquire companies such as an Israeli social networking site called face.com which allowed users to identify and tag photos of their friends, the terms of the deal are unknown but the sale was estimated at a giant sum of $60 million, and Facebook could potentially use face.com’s photo tagging expertise within the close future for Facebook’s future fruition.

Facebook also assimilated another social networking app, Instagram, for an alleged $1 billion, which not only enforced a relationship with the app and Facebook but also blocked any succession between Instagram and Twitter, one of Facebook’s main competitors. While the acquisition of Instagram may have not been a constructive financial decision for Facebook,

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