>But make no mistake: this is bad for Facebook. Sure some investors, Zuck and (maybe?) some employees made a few more dollars but Facebook doesn't need the money and neither do most of the investors. But that's incredibly shortsighted.
>Facebook's ability to retain and attract talent and make stock-based acquisitions is in large part determined by the health and outlook of their stock. If they'd IPOed for $20-25 and jumped to $30 then they would have a lot of momentum behind them.
Why do you think the momentum of their stock has an effect on facebook's ability to attract talent? That's certainly not something I'm looking at (future stock price, yes; current momentum, no). Facebook's stock performance thus far has not changed my view of the potential future success of the company, and I think anyone who has actually done their homework regarding the Facebook valuation would feel the same way.
Option based compensation usually has a strike price at the value of the company around the point of hiring. Options are more volatile than stock. If the share price drops further, the options would be worthless. As the share price rises, the option value rises even faster.
To get and keep talent you need not just a good work environment but cold, hard cash. Paying employees with stock options and grants on a stock on the way up is a very efficient way to encourage people to work for you or to stay working for you. You can also pay people with actual cash, but that's significantly more expensive to match the same level of reward. People who worked through the elbow at Microsoft, Google, Amazon, etc. became millionaires. And there are plenty more elbows out there for the taking in silicon valley, in new york, and elsewhere. It can be hard to compete for and retain employees who are talented enough to earn their millions by seeking out some other company. This is a huge problem at Microsoft, for example, where the stock has been flat for a decade.
Certainly there are many good reasons to work at facebook, but how many of those reasons can make up for missing out on millions of dollars? This is all the more relevant right now because so many of the early employees have gotten their millions through the IPO, and that has all the makings of creating a cultural divide in the company between those who got theirs and those who haven't, and won't.
>Facebook's ability to retain and attract talent and make stock-based acquisitions is in large part determined by the health and outlook of their stock. If they'd IPOed for $20-25 and jumped to $30 then they would have a lot of momentum behind them.
Why do you think the momentum of their stock has an effect on facebook's ability to attract talent? That's certainly not something I'm looking at (future stock price, yes; current momentum, no). Facebook's stock performance thus far has not changed my view of the potential future success of the company, and I think anyone who has actually done their homework regarding the Facebook valuation would feel the same way.