Whether Facebook Can Benefit from the Changing Between Private Limited Company to Public Limited Company

Decent Essays

Facebook is a social net working service, which is started in the United States by Mark Zuckerberg with his friends in 2004. The website's membership was initially limited by the founders to Harvard students, but was expanded to other colleges, and gradually globalization. In 2012, the fonder of Facebook, Mark Zuckerberg decide to convert the structure of Facebook from private limited company to public limited company. Facebook values shares at £24 each, and that its shares would began trading in New York on 18th of May 2012. It is seem that Facebook would be worth £66bn at this price. The following will analyse whether Facebook can benefit from the changing between private limited company to public limited company.

Ltd is the short for …show more content…

Facebook choose to be a Ltd company as it beginning, because Mark Zuckerberg and his classmates aer students on that time. So they do not have enough money to set up a plc company. And the aim of Mark Zuckerberg making facebook is that he just wants the make the distance of people become closer than before. And make the communication of people convenient. There are many advantages and disadvantages of Ltd and Plc. If a company chooses to be an Ltd, they can get money by selling their shares despite they can only sell shares to friends and family. This might be easy for the company to control the shares selling. That means Mark Zuckerberg only sell the shares of facebook to his classmates and family before its flotation. So he can choose which people do his shareholder. Ltd also can easier to attract investors because of the security of limited liability. The business is continuity to exist even one of the owners died or sick. However, being an Ltd has negative effects as well. The business cannot sell on the stock market means that they can not gather so much share capitals. This is a reason why Mark Zuckerberg decided to sell the shares on the stock market. The accounts of the business must be public, and the profit should share with the shareholders. The decision making is not just by one person. Sometimes it is a good thing for solve problems, but there is also a potential disagreement among shareholders. When a company

Get Access