FOX Business Network (FBN) Senior Correspondent Charlie Gasparino reports that the competitor social media site to Facebook, Twitter “is re-evaluating the timing for a possible IPO following Facebook Inc (NASDAQ:FB)’s problems.”
Sheryl Sandberg, chief operating officer (COO) of Facebook Inc (NASDAQ:FB) explains that we “screwed up our IPO because we wanted to screw Wall Street.” Gasparino says that the small investors are the ones that experience more “difficulty buying shares and selling.”
On when Twitter will decide to do an IPO:
“Fox Business has learned that a potential Facebook competitor, Twitter, is re-evaluating the timing for a possible IPO following Facebook’s problems. A person with knowledge of Twitter’s plans says any IPO is at least a year away, as senior management determines how best to deliver earnings as a public company. A spokesman for Twitter had no immediate comment.”
On what Facebook Inc (NASDAQ:FB) COO Sheryl Sandberg is telling institutional investors regarding the company’s IPO:
“’We screwed up our IPO because we wanted to screw Wall Street.’ That’s the explanation recently delivered by Facebook Inc (NASDAQ:FB) chief operating officer Sheryl Sandberg to at least one prominent institutional investor about how the social media network so badly misjudged investor demand and flubbed its much-hyped Initial Public Offering in May.”
On Sandberg’s reasoning for setting a $38 IPO:
“Sandberg told a large institutional investor at one recent meeting that the firm decided to price the IPO at $38 a share—in what underwriters believed at the time was a steep price—not just to get the most possible money out of the deal, but also to avoid Wall Street traders from “flipping” the stock, meaning they would buy shares at the opening price and sell them sometime later at a profit when shares start to rise amid additional investor demand. Sandberg said the company was seeking long-term investors who believe in Facebook’s future, this person said. But when the investor questioned her on why the company allowed insiders and venture capitalist financiers to immediately trade out of the stock, she explained that was part of Facebook’s “culture,” according to one person with direct knowledge of the conversation.”
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