AnswerTips: Double click any word to see a dictionary definitionThis week's lesson for Intermediate English learners is about Facebook, the popular social networking site, which was founded eight years ago this week on February 4, 2004.
Read the text below and watch the video, and then scroll down the page to see if you can answer some questions.
Facebook Shares To Be Sold on The Stock Market
Stock market investors will soon be able to buy shares in Facebook. The world’s biggest social media network presented documents to the Securities and Exchange Commission this week, in preparation for floating the company on the stock market and making an initial public offering (or IPO) of shares in the company.
Experts predict that the company could raise around five billion dollars by doing this, which would amount to one of the world's biggest IPO sales of all time; much bigger than Google's first public sale of shares, which raised around two million dollars back in 2004.
Facebook has eight hundred million users around the world, making it the second most visited website after Google. Some financial experts say that the social media network is poised to become one of the world's most valuable Internet companies.
Stock expert Anupam Palit says that among social media sites, Facebook is in a class of its own.
ANUPAM PALIT: "It is the biggest company in this space and we believe what makes it very unique from every other company that went public last year in this space is that it is very, very profitable."
Initial estimates place the total value of the social network between seventy-five and one hundred billion dollars, a figure which includes previous investments by other companies. David Kirkpatrick, author of the book “The Facebook Effect.”, believes that Facebook’s IPO will be historic.
DAVID KIRKPATRICK: "Will Facebook's IPO be the biggest IPO in American history, probably not, but it will certainly be by far the biggest Internet or technology IPO we've ever seen."
The stock sale also could make Facebook founder Mark Zuckerberg one of the world's youngest billionaires, at the age of twenty-seven.
Investment companies are likely to buy Facebook stock first. But investment manager Jim O'Shaugnessy says that is not so bad. He says the price of some IPO stocks are too high and fall not long after they first go on sale.
JIM O'SHAUGHNESSY: "Many IPO's come out being very, very overvalued because they get so hyped up and investors are so taken in by the story that they're willing to pay any amount just to be able to get into the stock. That generally translates to being very overvalued. So we generally tell investors that they should wait, probably a good full year before they look at buying stock that was recently IPO'd."
Recently, share prices of some Internet businesses have fallen after their stock was first offered. For example, stock of LinkedIn, Groupon and Zynga, dropped in price by as much as twenty-five percent after going public.
There were similar questions eight years ago when Google first sold stock to the public. Today, Google ranks as one of the world’s most valuable technology companies.
Questions:
1) When was the Facebook site founded?
2) How many users does Facebook currently have?
3) What does the acronym IPO stand for?
4) How much is Facebook worth, according to current estimates?
5) How much money is the sale of Facebook stock expected to raise?
Click on the link below to check the answers:
Facebook Shares To Be Sold on The Stock Exchange - Answers >>
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