Business English: Facebook IPO

Read the text about The Facebook IPO. Some phrases are highlighted and explained below. Don’t forget to answer the quiz and leave comments about the discussion questions.

Possibly the biggest business news so far this year has been the announcement that Facebook is filing for an initial public stock offering (IPO). For the average person, Facebook is just a place to meet and chat with friends online but in reality it’s an extremely profitable company. It has redefined the internet as a social experience and created millions of people who will always be known as ‘the Facebook generation’. So let’s take a look at what exactly FB’s latest move means:

FB IPO Facts:

1)    It is the biggest IPO of a technology company since Google and its only happening so the CEO, Mark Zuckerberg, can pay tax on his stock options.

2)    There are rumours that other investors may follow suit but it all depends on how quickly those first shares are snapped up.

3)    The company is owned by its founder, co-founders, staff, venture capital firms/clients and even Bono from the Irish pop band U2.

4)    An initial $5 billion of shares will be offered but analysts expect this to rise to an incredible $10 billion or possibly higher.

5)    Despite all the competition from Twitter, it is worth splashing out on some shares in FB because in 2011 alone it banked an unbelievable $1 billion profit. That was almost ¾ more than the previous year and forecasts look rosy for 2012.

6)    Revenues are pretty staggering, estimated at around $4 billion, the majority originating from advertising. The only issue is that FB seems to rely possibly too much on some of its main advertisers.

7)    Growth at FB hasn’t shown any signs of slowing down. Besides opening new offices and hiring staff, they are investing in data centres and new technology.

8)    The million dollar question on everybody’s lips is ‘where will the money go?’. Well, apparently employees will receive a financial wind fall on account of their stock units but the remaining amount will go on further acquisitions of technology companies. This is intended to keep FB, a company which some see as past it, contemporary.

For those of you eager to get your hands on your own piece of FB you will have to wait until early May when the shares of the company will be floated on the stock market.

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Business English IPO phrases

A public statement
Filing for an initial public stock offering (IPO)
An official request to sell company shares on the stock market
In reality
The real situation is
Given a new meaning
A social experience
Involving people and relationships
The Facebook generation
A group of people who grew up with Facebook
Latest move
Most recent action
Chief Executive Officer: the top person in a company
Stock options
A reduced rate for employees to buy company stock
Gossip/talk about things that have not been officialy confirmed
to follow suit
to copy
Snapped up
Bought sth quickly
The person who started a company
People who helped start a company
Venture capital firms
Investment companies
Business customers
The first
People who investigate, do research and give an opinion on events/information/data
Splashing out on
Spending money on
Forecasts look rosy
Future estimates seem positive
An amount people believe will be true
Originating from
Coming from
To rely possibly too much on
To be over dependent on
The million dollar question on everybody’s lips
The important question everyone is thinking of
A financial wind fall
A large sum of money people receive
Purchased companies
To be past it
Eager to get your hands on sthg
Really wanting/enthusiastic to have sthg
Floated on the stock market
Made available to the public

Discussion questions

Leave your opinion in the comments section below and a teacher will reply

  1. Would you invest in Facebook?
  2. What will happen to the company in the future?

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