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(Washington Post)   The real reason the Facebook IPO bombed: Zuckerberg didn't have an MBA   (washingtonpost.com) divider line 53
    More: Unlikely, CEO Mark Zuckerberg, IPO, MBA, Facebook, Columbia Law School, corporate governance, consumer behaviour, road shows  
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2366 clicks; posted to Business » on 30 May 2012 at 6:18 PM (2 years ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2012-05-30 06:15:31 PM
Ummm, you realize Zuckerberg wasn't the only one that worked on the IPO. Probably had hundreds of employees and consultants.

Heck, back in the dot-com boom days I remember our company getting $10 million in VC funding. No way that was happening without a team of outside consultants going over every inch of every single thing related to the company.

Heck, as far as I know, the SEC has to validate everything first. And then NASDAQ does its own audits.
 
2012-05-30 06:21:42 PM
The real reason is that he got mad at Goldman Sachs and cut them out if the IPO.


/the vampire squid always wins
 
2012-05-30 06:23:25 PM

downstairs: Ummm, you realize Zuckerberg wasn't the only one that worked on the IPO. Probably had hundreds of employees and consultants.Heck, back in the dot-com boom days I remember our company getting $10 million in VC funding. No way that was happening without a team of outside consultants going over every inch of every single thing related to the company.Heck, as far as I know, the SEC has to validate everything first. And then NASDAQ does its own audits.


What's a better education:

An MBA education where you take a couple of semesters of finance, or leading a company for 8 years where you are surrounded by VCs and bankers all particularly eager to train you?

What made the Facebook IPO fizzle was greed.
 
2012-05-30 06:23:41 PM
I don't think an MBA automatically cultivates ethics. I'm sure people that ran Exxon and AIG had MBA's.
 
2012-05-30 06:29:03 PM
No, the real reason Facebook is a flop and won't herald in a new age of unrestrained prosperity from now unto the end of time is because [INSERT TENUOUS, ONE DIMENSIONAL REASON HERE].
 
2012-05-30 06:32:41 PM
I vaguely remember reading/hearing that Zuckerberg really didn't care about the IPO and only did so because of SEC rules. The dude really doesn't care that he is a billionaire many times over.
 
2012-05-30 06:34:16 PM

hoho19: I vaguely remember reading/hearing that Zuckerberg really didn't care about the IPO and only did so because of SEC rules. The dude really doesn't care that he is a billionaire many times over.


What SEC rules? Unless this is some sarcasm I don't understand? No reason Facebook couldn't have been private forever.
 
2012-05-30 06:35:25 PM
The IPO didn't fail. The insiders got rich, the bankers got paid, and the sheep got fleeced. When Microsoft went public, Bill Gates was furious that the bankers didn't price the offer higher and left all that money for "Goldman Sachs' friends", when his own friends could have had it. Zuckerberg was just too smart to make that mistake.
 
2012-05-30 06:41:30 PM
That must be it. It couldn't have been because it was egregiously and obviously overvalued.
 
2012-05-30 06:43:03 PM

rumpelstiltskin: The IPO didn't fail. The insiders got rich, the bankers got paid, and the sheep got fleeced. When Microsoft went public, Bill Gates was furious that the bankers didn't price the offer higher and left all that money for "Goldman Sachs' friends", when his own friends could have had it. Zuckerberg was just too smart to make that mistake.


Exactly. The people who were supposed to make money did. The people who thought they would ride the IPO gravy train like it was 1999 got fleeced.

Doesn't make it "right", but as far as Facebook and Zuckerberg are concerned they got the exact maximum they could have out of the IPO.
 
2012-05-30 06:43:05 PM
seems it bombed because the MBA's convinced him to take a public company to make a quick buck that had no business going public....
 
2012-05-30 06:43:06 PM

downstairs: hoho19: I vaguely remember reading/hearing that Zuckerberg really didn't care about the IPO and only did so because of SEC rules. The dude really doesn't care that he is a billionaire many times over.

What SEC rules? Unless this is some sarcasm I don't understand? No reason Facebook couldn't have been private forever.


You basically have to go public when you have more than 500 investors, that happened at the end of 2011.

You have to go public so that your employees don't kill you after you handed them a shiat load of stock.
 
2012-05-30 06:46:25 PM
Holy hell, what a dumb article.
 
2012-05-30 06:48:36 PM

downstairs: hoho19: I vaguely remember reading/hearing that Zuckerberg really didn't care about the IPO and only did so because of SEC rules. The dude really doesn't care that he is a billionaire many times over.

What SEC rules? Unless this is some sarcasm I don't understand? No reason Facebook couldn't have been private forever.


http://m.aol.com/dailyfinance/default/articleStory.do?category=main&ur l=http://www.dailyfinance.com/2011/01/07/facebook-ipo-sec-500-investor s-2012/&icid=dsk_df_news
 
2012-05-30 06:49:41 PM

RoyBatty: You basically have to go public when you have more than 500 investors, that happened at the end of 2011.

You have to go public so that your employees don't kill you after you handed them a shiat load of stock.


Ahhhhh, I did not know that.
 
2012-05-30 06:51:09 PM

downstairs: hoho19: I vaguely remember reading/hearing that Zuckerberg really didn't care about the IPO and only did so because of SEC rules. The dude really doesn't care that he is a billionaire many times over.

What SEC rules? Unless this is some sarcasm I don't understand? No reason Facebook couldn't have been private forever.


Fark needs to work on their mobile version.

500 Investors
 
2012-05-30 06:59:59 PM
If he had an MBA, the company would have cratered within hours of the opening bell.

MBA's tend to be for the short gain and never for the long haul. They are one of the primary reasons for the whole economic collapse - coupled with the eastern ivy league school hubris.
 
2012-05-30 07:06:05 PM

Mark Z screwed over his co-founder and the Winklvii. You really think he's upset that some people got burned on the stock market? He's got his money.


I give Facebook five years before the next big social media site comes along and brings it down.

 
2012-05-30 07:18:59 PM
Or maybe it's because it's an over-valued virtual photo album.
 
2012-05-30 07:20:31 PM
I can't believe he didn't go to business school. To think, if he were an MBA, he could be holding down a solid, 6-figure job by now!
 
2012-05-30 07:23:29 PM

skinink: Mark Z screwed over his co-founder and the Winklvii. You really think he's upset that some people got burned on the stock market? He's got his money.
I give Facebook five years before the next big social media site comes along and brings it down.


I hear Google's doing something awesome.
 
2012-05-30 07:36:34 PM
If you saw the recent episode of 60 minutes where they profiled billionaire Peter Thiel, you would have seen the article's author. Thiel thinks higher education is an empty promise for way too many people, so he started a program where people with promising ideas are given $100,000 for them to drop out of college and work on developing their ideas. Wadhwa argued that this program was sending the message that college is an unnecessary waste of time.

I tend to agree with Thiel in that college really isn't for everyone. It's ridiculous that someone could think that an MBA could have helped make the FB IPO any better. My MBA certainly helped me in my profession, but it wouldn't have done much for Facebook and their IPO.
 
2012-05-30 07:46:00 PM

hoho19: downstairs: hoho19: I vaguely remember reading/hearing that Zuckerberg really didn't care about the IPO and only did so because of SEC rules. The dude really doesn't care that he is a billionaire many times over.

What SEC rules? Unless this is some sarcasm I don't understand? No reason Facebook couldn't have been private forever.

Fark needs to work on their mobile version.

500 Investors


But FB did not need to do an IPO. All FB needed to do was start biding abiding by SEC rules for a publicly traded company.

The IPO was merely a way for the insiders to dump massive amounts of stock and to allow the Wall Street bankers to make a billion.
 
2012-05-30 07:51:15 PM

HempHead: The IPO was [...] to allow the Wall Street bankers to make a billion.


Did they though? They'll have been paid their fees of course, but they also had to buy gazillions of shares themselves to prop the price up for the first day or two. Don't they have to eat that loss?
 
2012-05-30 07:51:45 PM

CaptainCliche: rumpelstiltskin: The IPO didn't fail. The insiders got rich, the bankers got paid, and the sheep got fleeced. When Microsoft went public, Bill Gates was furious that the bankers didn't price the offer higher and left all that money for "Goldman Sachs' friends", when his own friends could have had it. Zuckerberg was just too smart to make that mistake.

Exactly. The people who were supposed to make money did. The people who thought they would ride the IPO gravy train like it was 1999 got fleeced.

Doesn't make it "right", but as far as Facebook and Zuckerberg are concerned they got the exact maximum they could have out of the IPO.


Yeah, except for your narrative to work you would have to explain how Zuckerburg lost $2 billion himself, and will likely lose more.

Though everyone wants to knock the article because of butthurt over MBAs or whatever, it does have a point that Zuckerburg's instability and immaturity isn't really helping the company. Yes, I'm sure that he had a team of MBAs that helped him screw this chicken, but he was the screwer in chief. I'm tired of hearing about the new fad that education isn't necessary, Peter Thiel being the chief culprit, when its really misplaced anger about 1) the screwed up labor market and 2) the outrageous cost of college. This is what happens when you get a billion dollars to a stupid fad run by a kid that can string along a few lines of python together and get his rich friends to go along with it.
 
2012-05-30 07:59:35 PM
This is very true. I could have helped him whore out his company much more effectively and for half price.

/ MBA > all other degrees, including useless engineering degrees
// line set . . . .
 
2012-05-30 08:02:46 PM
If you ever want a company to eliminate its standards, alienate its biggest customers, and eventually run itself into the ground, just put an MBA in charge of it.
Unless the company doesn't have any scruples to begin with like Facebook.
 
2012-05-30 08:06:52 PM

struct: CaptainCliche: rumpelstiltskin: The IPO didn't fail. The insiders got rich, the bankers got paid, and the sheep got fleeced. When Microsoft went public, Bill Gates was furious that the bankers didn't price the offer higher and left all that money for "Goldman Sachs' friends", when his own friends could have had it. Zuckerberg was just too smart to make that mistake.

Exactly. The people who were supposed to make money did. The people who thought they would ride the IPO gravy train like it was 1999 got fleeced.

Doesn't make it "right", but as far as Facebook and Zuckerberg are concerned they got the exact maximum they could have out of the IPO.

Yeah, except for your narrative to work you would have to explain how Zuckerburg lost $2 billion himself, and will likely lose more.

Though everyone wants to knock the article because of butthurt over MBAs or whatever, it does have a point that Zuckerburg's instability and immaturity isn't really helping the company. Yes, I'm sure that he had a team of MBAs that helped him screw this chicken, but he was the screwer in chief. I'm tired of hearing about the new fad that education isn't necessary, Peter Thiel being the chief culprit, when its really misplaced anger about 1) the screwed up labor market and 2) the outrageous cost of college. This is what happens when you get a billion dollars to a stupid fad run by a kid that can string along a few lines of python together and get his rich friends to go along with it.


That shiat just burns doesn't it?

A smart programmer like you should be able to throw something together like Facebook in no time, really. I mean, shiat, it's just Python! Zuckerberg should be writing .NET, for farks sake. Hell, and his rich friends... who COULDN'T make a mint with friends like that? There's nothing standing between you and the likes of Gates, Brin and Zuckerberg, except you.

... which is why you're posting in a Fark thread about Zuckerberg and the Facebook IPO instead of being the subject of one. Oh, and the college thing? I bet you look at that sheepskin you sweated for every day and wonder what magic pill he swallowed and why your profs didn't give YOU any.
 
2012-05-30 08:13:42 PM

rosebud_the_sled: If he had an MBA, the company would have cratered within hours of the opening bell.

MBA's tend to be for the short gain and never for the long haul. They are one of the primary reasons for the whole economic collapse - coupled with the eastern ivy league school hubris.


Know how we all can tell you didn't get into business school?

As a guy with an MBA, it's tedious to repeatedly hear, "hurr durr ya don' learn nothin' in bizniz skool, who needs it? ya learn more by jus' doin' bizniz." Really? Do you have the same opinion about airline pilots? Medical professionals? Accountants?

For the record, business school teaches finance, organizational behavior, marketing, math and statistics, some computer science, business history, case studies and, yes, ethics, among other fields.

What you do with that education is your own thing, but don't shiat on the education. Especially if you don't have any of it.
 
2012-05-30 08:19:09 PM
Zuckerberg would have better understood... the importance of ethics and corporate governance.

BAAAAA HAAAA HAAAA HAAAA. Nothing like Wall Street blaming a stooge.

Nothing and I repeat nothing out of the ordinary occurred with this IPO. They are all fixed. And Zuckerberg didn't do the fix.
 
2012-05-30 08:53:56 PM

AddictedToFoobies: struct: CaptainCliche: rumpelstiltskin: The IPO didn't fail. The insiders got rich, the bankers got paid, and the sheep got fleeced. When Microsoft went public, Bill Gates was furious that the bankers didn't price the offer higher and left all that money for "Goldman Sachs' friends", when his own friends could have had it. Zuckerberg was just too smart to make that mistake.

Exactly. The people who were supposed to make money did. The people who thought they would ride the IPO gravy train like it was 1999 got fleeced.

Doesn't make it "right", but as far as Facebook and Zuckerberg are concerned they got the exact maximum they could have out of the IPO.

Yeah, except for your narrative to work you would have to explain how Zuckerburg lost $2 billion himself, and will likely lose more.

Though everyone wants to knock the article because of butthurt over MBAs or whatever, it does have a point that Zuckerburg's instability and immaturity isn't really helping the company. Yes, I'm sure that he had a team of MBAs that helped him screw this chicken, but he was the screwer in chief. I'm tired of hearing about the new fad that education isn't necessary, Peter Thiel being the chief culprit, when its really misplaced anger about 1) the screwed up labor market and 2) the outrageous cost of college. This is what happens when you get a billion dollars to a stupid fad run by a kid that can string along a few lines of python together and get his rich friends to go along with it.

That shiat just burns doesn't it?

A smart programmer like you should be able to throw something together like Facebook in no time, really. I mean, shiat, it's just Python! Zuckerberg should be writing .NET, for farks sake. Hell, and his rich friends... who COULDN'T make a mint with friends like that? There's nothing standing between you and the likes of Gates, Brin and Zuckerberg, except you.

... which is why you're posting in a Fark thread about Zuckerberg and the Facebook IPO instead of being the ...


I'm not a programmer.

I don't have an MBA either. I don't begrudge Zuckerberg his wealth, or Brin, Page, Gates, Bezos, Beinhoff, or Jobs. Its just those last 6 built real value, I don't think Facebook has it. So quit being a butthurt Facebook fanboy because someone questioned your hero and realize that an attack on that company's ridiculous model isn't an attack on success.
 
2012-05-30 09:34:31 PM
Wasn't it the MBAs who told him he could get 100 to 1 P/E? The most simple valuation calculation and he tried to take it into the atmosphere. People thinking 100 to 1 was a good valuation deserve to lose all their money. Apple is also way over valued, and they aren't anywhere near 100 to 1. Google is at 10 to 1 which is reasonable.
 
2012-05-30 09:50:40 PM
Well, lucky for Zuckerberg, Apple seems to be interested in rescuing Facebook from this mess. Apple's CEO has just said their relationship with Facebook is steady and that people need to watch what they will do.
 
2012-05-30 09:55:07 PM
Stopped reading at:
"This is the type of thinking that sews the seeds for disasters such as the Facebook IPO."

Really? Sews? Good night, does the WP even hire editors any more? I find it ironic that this great thinker is moaning about how more business leaders need an education. I argue that more journalists need to get an education. Maybe that would "sew" the seeds of readers taking them seriously.
 
2012-05-30 10:37:08 PM
Zuckerberg is a multibillionaire and the author and 99.99999% of M.B.A.s aren't. Scoreboard, and the I.P.O. didn;t fail, it did exactly what it was supposed to - milk money out of unsophisticated rubes that wanted in on the IPO regardless of how wildly overpriced the stock was. Zuckerberg (and Morgan Stanley) are farking maestros. They may have ruined public trust, but they made FB and a bunch of insiders a great deal of money.
 
2012-05-30 10:46:22 PM
Only only needs to look at HP or Yahoo to see why MBAs are poison for tech companies. "Professional management" is a nice way of saying "bickering vultures."
 
2012-05-30 10:51:22 PM

Setsuna: I don't think an MBA automatically cultivates ethics. I'm sure people that ran Exxon and AIG had MBA's.


Ethics seems to be an odd thing for an MBA program. It's not really part of a "profession" in the vein of CPAs, lawyers, professional engineers, etc....all of which have some kind of ethical code where a violation can get one's license removed. Are there any such ramifications for a CEO? The line there seems to be whether something is legal or not; doing something unethical (but otherwise legal) seems to be limited to bad press.
 
2012-05-31 12:03:29 AM
Look, I know some of us don't like Mark, but he was here from the beginning. You know he started out in the mailroom making eight five an hour. Then Scaggs said his work ethics were good, so he promoted him to Docks after he learned to drive the forklift. Three years later he was working for Emory in the main office, then he took over for Emory! And he never screwed any of us out of anything! So I say if he's CEO now we ought to support him!
 
2012-05-31 12:28:46 AM
People, this is simple, simple stuff.

The IPO bombed because it was valued at 100B, while the company is not WORTH 100B.

common damn sense. This is NOT bad for Zuckerburg at all, he didnt LOSE billions of worth, he just determined what his worth was.
 
2012-05-31 12:42:17 AM

struct: CaptainCliche: rumpelstiltskin: The IPO didn't fail. The insiders got rich, the bankers got paid, and the sheep got fleeced. When Microsoft went public, Bill Gates was furious that the bankers didn't price the offer higher and left all that money for "Goldman Sachs' friends", when his own friends could have had it. Zuckerberg was just too smart to make that mistake.

Exactly. The people who were supposed to make money did. The people who thought they would ride the IPO gravy train like it was 1999 got fleeced.

Doesn't make it "right", but as far as Facebook and Zuckerberg are concerned they got the exact maximum they could have out of the IPO.

Yeah, except for your narrative to work you would have to explain how Zuckerburg lost $2 billion himself, and will likely lose more.


Please explain how Zuckerberg "lost $2 billion" because the opening stock price was $38/share.
 
2012-05-31 12:46:06 AM

MyRandomName: Wasn't it the MBAs who told him he could get 100 to 1 P/E? The most simple valuation calculation and he tried to take it into the atmosphere. People thinking 100 to 1 was a good valuation deserve to lose all their money. Apple is also way over valued, and they aren't anywhere near 100 to 1. Google is at 10 to 1 which is reasonable.


Google's P/E is almost 18
Apple's is around 14

Are people that blinded by their hatred of the iPhone they can't use simple search engines?
 
2012-05-31 12:47:48 AM

MrEricSir: Only only needs to look at HP or Yahoo to see why MBAs are poison for tech companies. "Professional management" is a nice way of saying "bickering vultures."


I still think that's a bit too kind. "Sharks in a tank of razor blades", maybe.

I'm well aware of the reality of corporate politics, but I have yet to work in a place where IT isn't engaged in a ridiculous full-blown cold war with itself thanks to these freaks.
 
2012-05-31 01:39:48 AM
That article is farking retarded. I still have yet to meet anyone with an MBA that is inherently more capable than someone without.
 
2012-05-31 02:37:47 AM

neilbradley: That article is farking retarded. I still have yet to meet anyone with an MBA that is inherently more capable than someone without.


Agreed

/ mba
 
2012-05-31 02:47:11 AM

skinink: Mark Z screwed over his co-founder and the Winklvii. You really think he's upset that some people got burned on the stock market? He's got his money.
I give Facebook five years before the next big social media site comes along and brings it down.


5 years in internet time is forever, I give it 2 before it's a more empty wasteland than it is now.
 
2012-05-31 02:58:30 AM
mba students actually want ethics coursework, but most schools do a terrible job of providing such things.

/mba
 
2012-05-31 06:43:51 AM
Not having an MBA is one of the few things Zuckerberg has going for himself. An MBA is basically a degree for people who couldn't get a job with their BAs in marketing but also couldn't handle the math in accounting or economics.
 
2012-05-31 08:28:47 AM
What does FB do; AFAIK it is friending peeps don't pay tha bills?
 
2012-05-31 08:48:22 AM

El Pachuco: rosebud_the_sled: If he had an MBA, the company would have cratered within hours of the opening bell.

MBA's tend to be for the short gain and never for the long haul. They are one of the primary reasons for the whole economic collapse - coupled with the eastern ivy league school hubris.

Know how we all can tell you didn't get into business school?

As a guy with an MBA, it's tedious to repeatedly hear, "hurr durr ya don' learn nothin' in bizniz skool, who needs it? ya learn more by jus' doin' bizniz." Really? Do you have the same opinion about airline pilots? Medical professionals? Accountants?

For the record, business school teaches finance, organizational behavior, marketing, math and statistics, some computer science, business history, case studies and, yes, ethics, among other fields.

What you do with that education is your own thing, but don't shiat on the education. Especially if you don't have any of it.


I have a business degree and I think the article is a load of shiat.
 
2012-05-31 09:57:27 AM

Atomic Spunk: If you saw the recent episode of 60 minutes where they profiled billionaire Peter Thiel, you would have seen the article's author. Thiel thinks higher education is an empty promise for way too many people, so he started a program where people with promising ideas are given $100,000 for them to drop out of college and work on developing their ideas. Wadhwa argued that this program was sending the message that college is an unnecessary waste of time.

I tend to agree with Thiel in that college really isn't for everyone. It's ridiculous that someone could think that an MBA could have helped make the FB IPO any better. My MBA certainly helped me in my profession, but it wouldn't have done much for Facebook and their IPO.


That was an interesting story. I talk to high school counselors every November and I have to basically assert this point, though not in the same way that Thiel does, rewarding the brightest who should circumvent formal education. I'm usually directing kids to tech schools and healthcare programs rather than four-year degrees.

/Now we'll get mocked for watching network news?
 
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