Facebook last week announced its Initial Public Offering — exactly the event I said wouldn’t happen in one of my controversial predictions for 2012. But I’m sticking with my call on this one since we’re 2-3 months from the actual event and a lot can happen to screw things up between now and then. I’m pretty sure Facebook shares will be trading sometime this year, I just don’t think the company will have a traditional IPO.
Companies go public for three reasons: 1) to raise capital for various corporate purposes like acquisitions and paying down debt; 2) to secure the wealth of founders, giving their kids something to fight over, and; 3) because they have over […]
So Exchange Traded Index funds and the $1.2 trillion invested in them have increased volatility for small cap stocks making the whole IPO process less attractive for many founders of U. S. tech companies — our kind of companies. It’s not the end of the world but has been a downer of sorts for both the market and the tech industry for the last decade. What’s to be done about it, then?
I write a lot about technologies, companies and industries, some about economics, but hardly ever about stocks or trading, so this column is an unusual one. But because of the hard work of a couple economist friends of mine I’m finally coming to understand a stock market phenomenon that has been hurting tech startups for over a decade — Exchange Traded Funds. Forget about bad banks, cooked books and even the recession: Exchange Traded Funds are forcing more and more good tech companies to abandon the idea of ever going public.
