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The company's innovative business model was largely to blame for that gaffe. Because software companies typically sold products via long-term license agreements, accounting for commissions paid for on-demand subscription sales was a gray area.
That same year, Google was forced to amend its S-1 filing by including in its prospectus a poorly timed interview that co-founders Sergey Brin and Larry Page granted to Playboy.
In that case, it's easy to argue that the required S-1 revisions were made necessary by the inexperience of the company's founders, who should have passed on the interview in the run-up to Google's S-1 filing. Yet, high-profile tech companies often have innovative business models and are often led by young executives.
That's as true of Twitter as it was for Google, Salesforce.com and Groupon at the time of their IPOs.
It's also one reason Silicon Valley executives, venture capitalists and other investors lobbied for passage of the JOBS Act. Their argument was that fast-growing, young companies wanting to raise capital should face a less cumbersome path to an IPO.
In the end, the securities law changes included in the 2012 JOBS Act accomplished exactly that.
But the Facebook IPO, which saw retail investors suffer huge losses on IPO shares, showed how skewed the process was against retail investors, even before recent changes.
Before Facebook's IPO shares were priced, the company shared with some big Wall Street investment houses the fact that its mobile advertising business wouldn't be as profitable in the short term as many analysts believed. Those investors had the option of passing on the IPO.
But that data wasn't shared with all investors at the same time, because companies in the IPO registration process are exempt from the full disclosure rules that apply to already-public companies.
Only after Facebook shares began to plummet did retail investors learn that Wall Street wasn't as bullish on the mobile business as thought.
Facebook has gotten better at selling mobile ads, and its stock has recovered its IPO price, and then some.
But the heavy losses suffered by Facebook IPO investors showed that the process was in need of more financial transparency, not less.
Yet, less disclosure is what the public got, as Twitter's move makes clear. Instead of detailed data on finances and business operations, retail investors got a single tweet.
Welcome to IPO investing's future.
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