Implications of Students Online Activities - Essay Example

Fin 319 According to Muscarella, Peavy and Vetsuypens (79), there are differences in theinformation Facebook presented initially to the amendments it reviewed last. These include: implications of students online activities, freedom of speech and protection against the “likes” on the content page. Freedom to rights of speech is eligible to everyone whether young or old. With the introduction of many social networking sites like Facebook and my space, high school students had to be limited on their usage; this would cause total disruption of their academic progress. Facebook had to amend its first information it presented by allowing the school administrators to block access of the page by students when at school. Accessing Facebook pages by school going children will on only cause disruption and total shift from their academic work. Initially, there was no legal protection against the “likes” on the Facebook web pages. With the last amendment, many argued that technological “liking” of something has many effects and results. This had to be reviewed and given a second thought so that no more destruction happens to the users. The last thing about the last amendment is that of the freedom to speech protection. Some people were taking advantage of this right to violate and abuse other innocent users. With amendments of the issue, one can report, any form of abuse to the Facebook group. In return, prior action is taken by, blocking the individual, group or organization accused from any further using of the social group. This has brought a new face to Facebook group making it one of the safest in terms of usage. Neither we, nor the stockholders selling, nor the underwriters, have approved any person to supply any information or to form any representations other than those in this brochure or any free writing prospectuses prepared. No responsibility will be taken and can offer no assertion as to the dependability of, any other information given by others. During the IPOs of the companies, the shares were offered were classified into two classes, class A and class B. Class A shares offered by LinkedIn totaled to about 8,000,000, 1,271,255 Shares coming from the company and 6,728,745 Shares coming from the stockholders. It was estimated that the outstanding class A common stock to be outstanding after the offering would total up to 17,427,987 Shares while class B stock to be outstanding after the offering would be 80,127,627 Shares, both totaling to 97,555,614 Shares. Therefore, the total over allotment to be offered was to be 97,555,614 Shares. The total number of shares of Class A and Class B common stock outstanding after that offering was based on shares worth 9,427,987 of Class A common stock and shares worth 86,856,372 of Class B outstanding common stock, as of September 30, 2011. This excluded 16,702,981 shares of class B averaging at a weight of $7.34 for each share. Class A common stock of 499,455 shares was also excluded upon the exercise of outstanding options, the weighted-average exercise price being $7.34 per share. For Yelp, the following was their offers at the times of the IPOs: The number of shares of Class A and common stock of Class B shares to be outstanding after the offering was based on zero shares of common stock of Class A and Class B common stock of 52,773,181 shares, this included preferred stock on a converted basis. Class B common stock of 9,303,989 shares was issued upon the exercise of outstanding stock and with an average weighted exercise price of $5.48 for each share. Class B common stock of 1,037,357 shares was reserved for future issuance prior to the offering 2011 Plan. 3,575,500 shares of Class A common stock had to be reserved for future issuance 2012 equity Plan, to be effective in conjunction with this offering, as well as any increase in Class A common shares number of stock reserved for issuance in future under this benefit plan. 1,050,000 shares of Class A common stock had to be reserved for issuance under 2012 Employee Stock Purchase Plan that was to be effective in conjunction with the offering, as well as any regular increases in the amount of Class A common shares of stock set aside for future issuance under this benefit plan. For the Facebook group, the following were their offer during the IPO: Class A shares totaled up to 421,233,615 shares, 180,000,000 shares being offered by the company and 241,233,615 shares, coming from the stockholders. Outstanding Class A common stock after the initial public offering was to be 635,881,796 shares while the outstanding class B common stock after the initial public offering was 1,502,203,241 shares, these totaling to 2,138,085,037 shares. Over allotment option of class A shares offered by the company was 3,094,842 shares and those offered by the stock holders was 60,090,200 shares, the total amounting to 63,185,042 shares (Muscarella, Peavy and Vetsuypens 78). Facebook estimated their net proceeds from the sale of the Class A common stock, being offered would approximately be $6.4 billion, assuming that the initial public offering price of $36.00 for each share. Class B common stock of 116,756,442 shares were issuable upon the exercise of options outstanding with an average weighted exercise price of $0.94 per share. Class B common stock of 60,000,000 shares, issuable upon the exercise of the portion remaining was held by Mr. Zuckerberg, with a weighted average of price of $0.06 per share. For yelp, the following were the under writers: Goldman, Sachs and Company, Citigroup Global Market Inc., Jefferies & Company, Inc., Allen & Company LLC, and Oppenheimer & Company Inc. LinkedIn had the following: Lynch Merrill, Fenner, Pierce & Smith Incorporated, Stanley Morgan & Company. LLC and J.P. Morgan Securities LLC while Facebook had: Morgan Stanley & Company, LLC. Facebook made eight amendments yelp had ten while, LinkedIn had only two amendments. Yelp provided the most useful data, noting that it had a lot of amendments than either Facebook or LinkedIn, while LinkedIn with only two amendments, provided the least useful data. The total amendments for Yelp were ten while Facebook had only eight. By considering the fundamentals of all the three companies, each had the following prospects: Facebook offered 180,000,000 shares of its Class A common stock and the stockholders offering was 241,233,615 shares of Class A common stock (Muscarella, Peavy and Vetsuypens 77). This was their initial public offering, and they anticipated that the initial public offering price will be between $34.00 and $38.00 per share. LinkedIn prospects of the shares to be offered were 1,271,255 of their common Class A stock and the stockholders selling offering to be 6,728,745 of Class A common stock, their initial public offering will be $79.01 per share. Lastly, Yelp prospected an offer of 7,100,000 of the shares. The selling stockholder was offering additional 50,000 shares. The initial public offering price per share would be between $12.00 and $14.00 (Muscarella, Peavy and Vetsuypens 80). The following are the limitations and uses of over allotment: there is unprotected Short Selling and organization Covering Purchases, posing a high risk for the underwriters to lose money, by engaging in naked short sales. There is also a risk to inventors since; price stabilization is viewed as a way of transferring risk, to a comparatively inexperienced section of the investor population. Over allotment allows underwriters, to sell additional shares in registered securities being offered at the offering price, if need for the securities surpasses the original quantity offered. Facebook over-allotment options are: one, allow the underwriters to sell extra shares set aside specifically for the purpose if the demand exceeds the expectations. Second, the underwriters could buy back their stock at the initial offering price if they are traded lower than the priced amount. When Facebook’s stock fell to the IPO price, the underwriters could have sold the extra shares set aside by the company and leave their own shares intact so that they could trade them when the prices had stabilized. Another option would have been, for them to sell the shares at the price of the IPO and later demand to buy back their shares at the initial price during the offering. Facebook performance during the first week was lower as compared to both Yelp and LinkedIn. Based on real figures, Facebook’s volumes and returns were low, while LinkedIn recorded the highest than the two. The net income for LinkedIn, as for the year 2011 march was high with Facebook recording the least. On the other hand, Yelp had reasonably large volumes and a considerable net income (Muscarella, Peavy and Vetsuypens 81). This does not reflect the fundamentals of each company noting that Facebook is at a better level than the other two. Volatility of LinkedIn has tremendously expanded and performs better after their IPO noting that: they have achieved significant growth as their network has scaled and they have expanded their product being offered. From the years, 2009 to 2010, their net revenue has increased $123.0 million which reflect 102%, net income has increased by $19.4 million, representing 487%, and adjusted EBITDA which has increased by $33.3 million, representing 227%. In the nine months which collapsed September 30, 2011, the total net revenue increased by $193.0 million, which is 120%, and EBITDA adjusted increased by $32.7 million, representing 103%, over the nine months ended September 30, 2010. Work cited Muscarella, Chris, Peavy, John and Vetsuypens, Michael. Financial Analysts Journal. Vol. 48, (1992): 76-81. Print. Read More