Mark Zuckerberg, CEO of Facebook, announced in early February that his popular social network will go public.
Facebook plans to raise $10 billion when it files in spring 2012. An initial public share is the first sale of public stock by a company to the public.
What does this mean? It means Facebook will now be a public shared company, where big and small investors alike can buy shares in the company.
Stock shares often go for as little as $20 to $50 on average. Although Facebook has yet to announced its stock share price (due later in the year).
What does this mean to Cerritos? The state of California ends up taxing stocks from businesses such as Facebook.
Vice President of business services David El Fattal explains the benefits of going public. “California ultimately taxes the wealthy people from selling their IPO’s will go into the state’s funds and theoretically that will help the state’s finances which in turn will roll out and help the college’s finances.”
Pre-Med major Daniel Jaramillo feels that Cerritos College should invest in stock shares such as Facebook, “So it can invest into new programs, or anything that benefits students financially.”
Jaramillo states Cerritos should look into any new ways of producing money for the college because money is really scarce right now in this economy and it should be doing anything to make college more affordable for students.
Facebook is expected to bring in $4 to 5 billion from public shares, the state of California is anticipating collecting $400 to 500 million in tax money.
El Fattal comments “Just to keep in context, the state has a $9 billion deficit, that means they have $9 billion more in expenses annually than they do revenue, so even if the Facebook IPO generates $400 to 500 million. It’s a big help, but it’s not going to solve the state’s financial problems.”
Oralia Neria, majoring in theatre arts says “ It would be a good idea because there are a lot of young people on Facebook, I think they should put it towards to helping the students who can’t afford tuition since it began to rise.”
With the state’s new budget, Cerritos is receiving $16 million less a year since 2008-09.
The college is rapidly losing money so El Fattal hopes that with the potential success of Facebook shares, the state can start funding the school.
