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Facebook: Lots Of Friends, But Stock Offering Has Risks

Publication Date: 
February 08, 2012
National Public Radio - All Things Considered
Steve Henn

Fellow at the Rock Center for Corporate Governance Vivek Wadhwa was quoted in the following broadcast by Steve Henn in NPR's All Things Considered on Facebook's IPO filing.

When a company files to go public it has to lay out in black and white the biggest risks that face the firm. What could kill it? What could undermine its business? Wipe out all its investors' money? Executives are required to reveal this by law.

It makes great reading, so I've been flipping through Facebook's IPO filing. And by far my favorite section is labeled "Risk Factors." Sure, there's some gobbledygook, but the part on mobile advertising is fascinating — if you pull it apart.


"These are young kids that we are talking about typically in their early 20s. Suddenly they have more money than they ever dreamed about," says Vivek Wadhwa, a fellow at Stanford's law school and an astute observer of Silicon Valley culture. "When you have so much money to spend, suddenly working day and night becomes less of a priority."