Thursday, May 24, 2012

Business Insider has an interesting analysis of the Facebook IPO debacle. It appears that the offering was rife with preferential distribution of information and a lack of transparency during the "road show." In truth this is the big news regarding the IPO, not the tanking of the stock's value.
Facebook's corporate governance rules effectively deny the company's owners, i.e. the stockholders, control of the company and vesting all control with Mark Zuckerberg and his management team. For an investor, such corporate governance is difficult to stomach even when management has proven worthy of trust. Zuckerburg and Facebook are not trust worthy. Why would you want to invest in a company with an unclear business strategy, untrustworthy management and unfair corporate governance? I won't be.


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