Hey Acquired listeners. A note about this show: we recorded this episode the night before the 2016 Election Day in the US. At the time, the biggest change we saw coming was adding a new type of content to Acquired in analyzing IPO’s, which we introduce in this episode. Two days later, we woke up to a very different world than the one we were expecting. Reflecting on what’s happened, and the past few months of our show, we wanted to say two things:

First, we want to apologize for our cavalier attitude toward this election cycle, and our glossing over the clearly very real problems and deep divide in America that it represented. In the Skype episode, David pretty glibly compared the AT&T - Time Warner merger to "Make America Great Again", arguing that any reactionary force is “on the wrong side of history” and cannot be relevant in a changing world. That was wrong, the sentiment behind it was wrong, and it was insensitive to the very real pain a lot of people are feeling out there on both sides.

Second, looking back on this particular episode about the Facebook IPO, we think it actually might present a relevant parable for our country right now and--we hope--some important lessons for the technology industry going forward. For all the wonderful aspects of the tech industry that we celebrate on this show, there is no doubt that it also bears a great deal of responsibility for the current divide in America, and especially in its contribution to wealth inequality. Likewise, for all the wonderful aspects to the Facebook IPO story, as told in this episode, there is a very dark side as well: Facebook shareholders, investment banks and institutional investors raked in billions of dollars at the expense of individual retail investors who lost their shirts.

At the same time, Facebook’s perseverance through their “broken IPO", and their determination in overcoming with incredible speed the massive, existential challenge to their business model posed by mobile, is something we think *can be* an inspiration to us all on how to move forward even when that seems hard. We hope you’ll listen to this episode with that in mind and think about how you, we, and the technology industry as a whole can do better in serving everyone in this country and in the world.

Thanks for being on this journey with us. We’re sorry for our shortcomings, and we’re going to keep working hard to do better.

-Ben & David

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Topics covered include:

• Introducing a new content vertical for Acquired: analyzing IPO’s! • Facebook turning down early acquisition offers, including including the famous $1B overture from Yahoo in 2006 The Wikipedia entry on the Facebook IPO • referencing it as a “cultural touchstone” • Trading of pre-IPO Facebook stock on SecondMarket and SharesPost The infamous 2011 Facebook - Goldman Sachs deal • attempting to circumvent then-active SEC regulations on number of permissible shareholders in a private company, and Goldman’s eventual loss of “lead left” status to Morgan Stanley for the ultimate Facebook IPO Facebook’s S-1 filing • on February 1, 2012 • The company’s "small problem" at the time (read: gaping chest wound) with mobile • Acquiring Instagram for $1B while on file to go public in April 2012 • Facebook’s $16B IPO finally taking place on Friday May 18, 2012, priced at $38 per share giving FB an initial market cap of $104B • NASDAQ’s “technical glitch” (read: egregious f*&# up • ) preventing the stock from trading when it supposed to and resulting in $500M of investor losses • Facebook’s stock tanking following a flat first day of trading, losing 25% of its value during the first month and over 50% 4 months later, leading some to label it “ The Biggest IPO Flop Ever • " • Later revelations that Facebook had unprecedentedly lowered revenue guidance during its IPO roadshow due to continuing challenges with mobile • , resulting in an information asymmetry between its underwriting investment banks and their institutional investor clients versus the investing public at large • How, from the ashes of its “broken IPO”, Facebook amazingly rose to fix its mobile problem at lighting speed, going from mobile comprising zero percent of ad revenue to 23% in one quarter, and over 50% one year later • Zuckerberg's belief that the difficult IPO process and "terrible first year” as a public company " made our company a lot stronger • ”… and silicon valley’s bizarre, antithetical and counter-productive take away to “ stay private longer • ”

Followups:

The scoop on Microsoft’s use of foreign cash to buy Skype • , thanks to longtime listener and friend Nick Seguin

Hot Takes:

• Twitter shutting down ( or selling? • ) Vine

The Carve Out:

• Ben: Amazon employee #1 Shel Kaphan on the great Internet History Podcast • David: Connectography: Mapping the Future of Global Civilization • by Parag Khanna