The Facebook IPO Hype (Essay Sample)

The Facebook IPO Hype
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The Facebook IPO Hype
* (a) Benefits and Drawbacks of Going Public
There are many benefits of going public for startup companies, including getting a channel for getting funds to finance operations and expansion. The primary source of capital for companies is seeking financial loans from banks and other lending firms. However, there is always a loan limit beyond which the organization cannot access fiscal loans. Therefore, it can only access additional finances by selling its assets. Therefore, companies that focus on growing their assets will go public to raise additional funds through the sale of stock instead of selling their assets (Khurshed, 2019). However, going public also has shortcomings, such as a drop in the company value. Going public exposes, the company to various factors in the stock market, and the share prices can shrink quickly to reduce the company's worth. 
(b) Factors that Motivated Facebook to Go Public
Many factors led Facebook to go public. First, the company sought a $100 million credit line that would enable it to secure data centers since its number of users increased significantly at the time. It needed new data centers to help store the influx of data (De Maeseneire & Divakaruni, 2012). However, Facebook could not secure the credit line from its primary bank,