Whether Facebook Can Benefit from the Changing Between Private Limited Company to Public Limited Company

1508 Words Mar 7th, 2013 7 Pages
Facebook is a social net working service, which is started in the United States by Mark Zuckerberg with his friends in 2004. The website's membership was initially limited by the founders to Harvard students, but was expanded to other colleges, and gradually globalization. In 2012, the fonder of Facebook, Mark Zuckerberg decide to convert the structure of Facebook from private limited company to public limited company. Facebook values shares at £24 each, and that its shares would began trading in New York on 18th of May 2012. It is seem that Facebook would be worth £66bn at this price. The following will analyse whether Facebook can benefit from the changing between private limited company to public limited company.

Ltd is the short for
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On the other hand, this might be difficult for the company to control the shares selling. Similar to Ltd, Plc is continuity too. And the weakness is also like a Ltd. The main difference between Ltd and Plc is the size of business.

It is said that in the end of 2011, the company income is $3.7 billion, up 88% on the previous year. The net income is $1 billion; increase nearly 400 million, measured in percentage is increasing by 65%. (http://www.ftchinese.com/story/001042946). It is very successful for facebook to increase so quickly as an Ltd in a few years. When it turn to the plc, the size of the business become much bigger than before. Facebook shares ended their first day of trading at $38.23, barely above the company's initial pricing of $38. Shares in the social network rose more than 10% to $42 within minutes of trade beginning, before quickly falling back. (From: http://www.bbc.co.uk/news/business-18125532). It is seems that Facebook does not has a good start on the flotation. Facebook flotation means the structure of Facebook from Ltd to Plc. The benefit for this decision is Facebook can get more money form the general public. Facebook has a lager number of customers; the expansion of facebook will bring them a dramatic increase in profits. However, flotation can bring facebook a amount of investors and capitals despite they

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