Title:
Facebook Finds New Friends in the World of Private
Finance
Description: This is
a VOA Special English Economics Report.
See text below
Text:
Facebook is the world's biggest social network --
and the subject of the movie "The Social
Network."The real Mark Zuckerberg and his friends at
Harvard University launched the site in two thousand
four. Facebook says it reached five hundred million
users last July.Now, the American bank Goldman Sachs
and the Russian company Digital Sky Technologies
have friended Facebook. They are investing a total
of five hundred million dollars in the company. The
deal values Facebook at fifty billion dollars --
more than many publicly traded Internet companies.
Goldman Sachs is expected to raise a billion and a
half dollars more by selling shares of ownership in
Facebook to rich investors. The plan does not
include a public stock offering -- at least not
right now. For now, Facebook would remain a private
company -- meaning a company that does not sell
shares to the public. The plan has brought new
attention to the largely secretive world of private
financing and the rules for private companies in the
United States.The idea is that investors in public
companies have protections that investors in private
companies do not. The Securities and Exchange
Commission says a private company must report
financial information if it has more than five
hundred shareholders. A new business, a startup
company, is usually considered too risky for average
investors. But a promising startup may find a small
number of private investors, often known as
"angels." These investors are willing to lose
everything for a chance at big returns.Rikki Tahta
has been involved in raising money for startups. He
is now chairman of his own investment company,
Covestor, with offices in New York and London.Mister
Tahta compares the difference between public and
private companies to the difference between marriage
and dating. When people are dating, he says, there
are understandings but few rules. In marriage, the
rules are more clear and well-defined.In his
opinion, the only real benefit for a private company
is lower administrative and record-keeping costs.
Yet he tells us Covestor remains a private company
after a few years because it is still too risky for
most investors.For VOA Special English I'm Alex
Villarreal. You can comment on our programs and find
transcripts and MP3s at voaspecialenglish.com. We're
on Facebook and Twitter at VOA Learning English.
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personally reviewed this video and found it appropriate for
the news section of English Global Group. This
is a Voice of America video which covers an interesting
topic in Special English. I would appreciate some feedback from both
students and teachers about this video. You can comment in
the window below using any of a number of different services
including Facebook, Yahoo, AOL, and Hotmail.
