The Problem With Breathless Speculation Over Tech IPOs

Despite reports of stalls and delays, both Facebook and Groupon are evidently back on track to IPO within the next six months or so. According to a report in Thursday's New York Times, Groupon has sorted out its trouble with the Securities Exchange Commission over a leaked memo during its quiet-period and "is now aiming to go public in late October or early November." Facebook's plans are less clear, but Times sources did deny a Financial Times report that Mark Zuckerberg was delaying his company's IPO until the end of 2012. "Facebook, the social networking giant, whose potential for a public offering is the stuff of breathless speculation, has yet to nail down a plan," says The Times. "The company is still planning to go public in the first half of next year, people close to the matter said on Wednesday." This latest round of "breathless speculation" brings up a broader question about the consequences of Facebook and Groupon's false starts. Since the companies are so young, many people wonder if the sloppy IPO-planning is a symptom of disorganized leadership, and because the buzz that follows their progress is so deafening, others wonder if there's too much hype, the kind of hype that points to a bubble. What do these companies gain by going public, anyways? And what do they lose?

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