Posted on 05/24/2011 5:55:47 PM PDT by Kaslin
Silicon Valley is teeming with budding startups whose user bases and valuations are skyrocketing. As these companies seek breathing room to grow, they will face a tough decision: stay private, seek out a buyer or go public.
Making this complex choice all the more challenging is government uncertainty. Filing for an initial public offering is harder than ever due to the onerous regulations and burdensome laws Washington has handed down over the past decade.
Microsoft's $8.5 billion purchase of Skype surprised analysts, many of whom had predicted Skype would seek an IPO or a deal with Facebook or Google.
Meanwhile, Facebook has kept quiet in face of speculation over whether it might file for an IPO. So far, the social networking giant has focused on raising capital privately. Given the risks of going public in this environment, Facebook's decision is understandable.
While some tech firms — including LinkedIn, Kayak and Demand Media — have gone public or filed for IPOs in the past year, many others — including Hulu, Zynga, and Twitter — are reportedly leaning against going public this year. Some of these may be acquired, as happened with AdMob, a mobile advertising startup rumored to be pondering an IPO until Google bought it for $750 million in 2009.
Why do tech companies appear more reluctant to go public today than they were during the tech sector's heyday of the early 2000s?
While many factors are at play, new regulations on the finance sector and heavy-handed legislation enacted since the dot-com boom deserve much of the blame.
(Excerpt) Read more at investors.com ...
Some people (suckers) never learn. Seems like history repeating itself. Remember the the Dotcoms of the 90s anywone? Remember the cooked up valuations? Remember the fake books?
You forgot histories biggest lesson - capital goes where it is wanted and stays where it is well treated. Sarbox is a mess. It puts your country at risk.
Most critical story of the day - destruction of capital and capital markets and you get a revanchist comment from the land of the blind.
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