Social Media Companies: Money and Markets

1551 Words4 Pages

Question 1

Advantages and disadvantages of going public. Do these factors apply to twitter?

Advantages

Improves the company’s capital raising ability to fund future growth and acquisitions and pay down debts

Market develops a greater awareness of the company

Limited Liability for the shareholder

The business has a separate legal entity. There is continuity if any shareholders die

Taxation

Disadvantage

A lot of costly and time consuming legal formalities

Strict controls and regulation

May lose some control over company

Public Companies are big. So may face management problems such as slow decision making and industrial relation problems

The price and liquidity of the company’s shares may be affected by market conditions as a whole no matter how well the business is run.

These factors do apply to twitter but they do not effect twitter as much because twitter was a massive company before going public.

Compare the NASDAQ and the NYSE. Why did Twitter choose the NYSE to list their shares?

Two of the largest stock exchanges in the USA are NASDAQ and NYSE. They both use different trading tools. Trades on NASDAQ are entirely automated, the NYSE uses designated specialist for each stock who act as a human backstop in case something goes wrong with electronical trading. NASDAQ has made a name for its self as an exchange for successful technology companies such as Microsoft, Intel and Oracle. It is the 2nd largest Stock exchange in the world by market cap; NYSE is the largest.

But why did Twitter choose the NYSE to list their shares instead of the NASDAQ which deal with some of the largest tech companies in the world; One simply needs to look at the botched job by NASDAQ on the Facebook IPO. I don’t thin...

... middle of paper ...

...iography

NASDAQ vs NYSE - Difference and Comparison | Diffen. 2014. NASDAQ vs NYSE - Difference and Comparison | Diffen. [ONLINE] Available at: http://www.diffen.com/difference/NASDAQ_vs_NYSE. [Accessed 21 May 2014].

Twitter, Inc. Common Stock Share Price Chart | TWTR - Yahoo!7 Finance. 2014. Twitter, Inc. Common Stock Share Price Chart | TWTR - Yahoo!7 Finance. [ONLINE] Available at: https://au.finance.yahoo.com/echarts?s=TWTR. [Accessed 27 May 2014].

Does the Facebook deal signal a new tech bubble? | Talking Numbers - Yahoo Finance. 2014. Does the Facebook deal signal a new tech bubble? | Talking Numbers - Yahoo Finance. [ONLINE] Available at: http://finance.yahoo.com/blogs/talking-numbers/does-the-facebook-deal-signal-a-new-tech-bubble-193203053.html. [Accessed 29 May 2014].

https://www.commbank.com.au/business/rates-fees.html#betterbusinessresidental

Open Document