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May 21, 2012 08:43 am GMT

How The Media (Including TechCrunch) Is Wrong About Facebooks IPO

facebook-openJudging by many of the headlines on Friday, you might think that Facebooks IPO was a miserable failure. The Wall Street Journal declared, Facebooks IPO Sputters, and our very own TechCrunch declared that bankers were struggling to keep the share price up. Nevermind that it was the highest ever IPO valuation and one of the largest sums of money ever raised by a U.S. company. According to the pundits, what really matters is that the stock price didnt increase in value--or pop--post IPO and is being propped up by banks. Taking bets on whether an IPO will pop provides entertaining fodder to help pundits promote their interests, but it misses the point. This view represents a fundamental misunderstanding of the purpose and economics of an IPO. By the correct measures, the Facebook IPO was a resounding success. Let me explain why.

Original Link: http://feedproxy.google.com/~r/Techcrunch/~3/eUs3ELhKd6E/

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