Diary of an IPO: The Facebook-Instagram edition

Posted by on April 18th, 2012

The Wall Street Journal reported today that, for all intents and purposes, the Board of Directors of Facebook was not consulted on the $1 billion Instagram acquisition until a week ago.

When Facebook’s S1 was filed, I noted the fact that Mr. Zuckerberg maintains a 57% voting right in the company and suggested that this could be problematic. Instagram is a case in point. I ask again, why would any investor, especially institutional investors, consider investing in this company when their equity voice may be meaningless?

This is separate from my questions regarding the Company’s IR communications, particularly those with respect to a discussion of its business plan, road map and explanation of why a $100 billion valuation is justified. Stay tuned for my next blog analyzing Facebook’s IR actions.