[awakeasleep]

From what I've read, Facebook isn't really interested in cultivating investment. Look at the small float, and Mark Z's firm control of the company with over 50% ownership.

In many ways, for the man on the street Facebook isn't a good investment. At the same time, it doesn't seem to be a goal of management to create a company that entices investors. See the line "we make money to create a better product, not create products to make money."

Doesn't that say it all?

[bonafidehan]

The value of equity for a public company isn't a metric that only investors care about. It is the most comprehensive measure of a public company's well-being. It describes how much money the company is making and it predicts how much money the company is expected to make in the future.

E.g., suppose Facebook's equity takes a significant decline in value on the public market: employees become unhappy as the equity component of their compensation declines; Facebook's ability to make large acquisitions becomes more expenseive when its stock is worth less; and its ability to raise capital diminshes because it's more expensive to borrow exactly because their financials aren't as good, according to their stock price.

I personally believe that the long-term goals of investors and founders are very well-aligned. I believe that the common statment by founders nowadays, that they are building a company not for their investors but for their users, will produce the long-term financial results that investors want. It's the short-term goals of investors that conflict with that.

In short, equity isn't this isolated thing that can be happily ignored. It's tied to everything.

[Gormo]

Then why the IPO, except as an exit strategy for the founders?

So Zuckerberg cashes out at Facebook's peak, leaving the subsequent 'investors' with nowhere to go but down. I wouldn't necessarily put that intention past Zuckerberg, and perhaps a Facebook collapse would be a good thing for openness and interoperability on the web, but isn't it a bit of a self-defeating strategy? Can the hype machine generate enough naive investors to generate a substantial cash-out?