I do not understand the Facebook IPO

@Fatcat44 (1141)
United States
May 24, 2012 11:40am CST
I am trying to figure out how the Facebook IPO can be legitimate. Facebook makes most of its money on advertising. From my limited understanding from being online, that would be stuff like pay to click (PTCs) and affiliate marketing. Well, with the IPO, thousands and million of people can be stockholders in the website. Therefore, is one of these stockholders click on a google ptc ad, isn't that in violation of the google adsense rules? How can this company as an IPO be legal? Also, I do not understand how a company which makes 1 billion dollars in profit sell for over 100 billion. that is about 1 percent return on investment. This did sound like a good investment to me. Maybe this is why Saverin was so hot to trod to get out of the USA? I just don't get it!
2 people like this
4 responses
smilywomen
@surekharathi (14146)
• India
11 Jan 13
I not understand about IPO and not interested to invest the money in it because some time opening cost is less and my money is lost. I dont like this invest the money in shares.
maharlikah
@maharlikah (1045)
• Philippines
25 May 12
I just heard about this term, IPO.. The more I can't understand this. And I never knew it makes 1 billion dollars in profit. The is a huge money.
sweety_81
@sweety_81 (2124)
• India
25 May 12
Well, sometimes the way market works look like stuff out of a fairy tale. I think that brokers and other people associated with the stock markets think that a company 'xyz' would do so and so, and make "=A" amount of profit. On that basis they evaluate that company. It is speculation- which may work. It may not work!
petersum
@petersum (4522)
• United States
24 May 12
No Internet site is worth a billion, let alone multiple billions. We will find that out soon enough! But for now, the banks want to cheat everyone and each other to f*ck up the whole global economy. The facebook offering was paid for by non-existant money, so if it were lost - well it didn't exist anyway! What, you didn't understand Monopoly? Pass Go and... become a banker!