In February of 2012, the worlds largest player in social media, Facebook, decided to apply to become a publicly traded company. Facebook had said that they were looking to raise approximately $5 billion dollars in hopes to finance projects that would ultimately grow their company (Luckerson 1). With 845 million active users, little debt, and records of strong annual profits; Facebook was evaluated to trade at $38/share, estimating the company's worth at approximately $104 billion dollars. (Luckerson 1) The IPO price had been record setting for a newly public company. The IPO sparked a ton of interest with investors that saw the potential profit, and Facebook ended up raising $16 billion dollars in investments. Since hitting the stock market on May 18, 2012, Facebook currently trades at $77.70 and is evaluated at almost twice their IPO. (Luckerson 1) Its safe to say that becoming public has worked out well for Facebook financially, but that isnt always the case for others. Why do companies look to trade publicly, while some remain to stay private? How are IPOs evaluated? Why Did it Work for Facebook? There are many advantages to being a publicly traded company. Shares of a public company are much more liquid than that of a private company because of the stock exchange. (Block 475) The stock exchange makes buying and selling stock simple, and easy. This means the public companies can reach investors much easier, quicker, and often at higher stock prices. Another advantage is that companies can use stock as an incentive for employees. Using stock incentive plans, publicly traded companies can attract and retain exceptional employees. (Block 475) Although the advantages of becoming a public company are enticing, there are some drawbacks. It might be in some companies best interest to remain private. One of the biggest disadvantages is the added workload of being a publicly traded company. More specifically, senior management will be re