We will probably never get to know what went “wrong” with the FB IPO, apart from momos buying hope. Bloomberg provides some insight on the SEC vs FB relations, prior to the IPO.
The incident was part of a two-and-a-half-month volley of messages among SEC officials, Ebersman and Facebook’s law firm Fenwick & West LLP. A dozen letters, published a month after the May 17 IPO on the SEC’s website, depict a management team hesitant to disclose information and still guessing at even rudimentary aspects of its business just weeks before the company held the largest-ever technology initial public offering. Many of the issues raised by the SEC and now unnerving investors were foreshadowed in the then-private correspondence between the SEC and Facebook.
“They were given the benefit of the doubt when they went public that they were ready for prime time,” said Michael Pachter, a managing director at Wedbush Securities Inc. “They still haven’t proved that they are.”
On the most critical issue facing Facebook’s future as a public company — whether it could make money from the soaring number of mobile users, who see fewer ads than other customers – - the letters show executives holding back crucial details until the SEC pushed for further disclosure.
Noting that Facebook was counting some mobile users twice, Jacobs wrote on March 22: “Please explain to us how you determined that your metrics are not overstated.”
Full article here.