CNN news 2012-05-18 加文本

cnn news 2012-05-18

CARL AZUZ, HOST, cnn STUDENT NEWS: Hello and welcome to your midweek edition of cnn Student News. Today we`re going to take stock of a social network going public, and here`s some advice for college graduates. But we start with a new political era in France.

Francois Hollande is the new leader of that country, and he`s the first French president since 1995 who`s a member of the socialist political party.

AZUZ (voice-over): Here you see Hollande on the right with outgoing President Nicolas Sarkozy. The new president was sworn in at his inauguration on Tuesday. During a speech that afternoon, he said, quote, "The challenge of this term is recovery. France will rise again and build on the strength and the energy of its creators, of its engineers, its researchers.

After he was sworn in as president, Hollande immediately headed to Germany to meet with that country`s leader, Chancellor Angela Merkel. Of all the countries that use the euro as their currency, Germany and France have the largest economies. So they have a lot of influence on the European economy, which has been struggling.

The American president spent part of yesterday paying tribute to U.S. law enforcement officers. President Obama took part in the National Peace Officers` Memorial service. The tradition started 30 years ago. It honors the men and women who lost their lives in the line of duty in the last year, and it`s part of National Police Week.

That includes events like this candlelight vigil from Sunday. According to a report that was released by the FBI on Monday, 72 law enforcement officers were killed in 2011. That`s an increase from the previous year. And FBI director Robert Mueller said, quote, "Each of these losses is devastating and each one reminds us that the safety and the freedom we enjoy come only at great cost."

UNIDENTIFIED FEMALE: See if you can ID me. I`m an entrepreneur who was portrayed in an Oscar-winning movie. I went to college at Harvard, but I didn`t graduate. I`ve been listed as one of the world`s youngest self- made billionaires and many of you use my social network every day.

I`m Mark Zuckerberg, the cofounder and CEO of Facebook.

AZUZ: Zuckerberg and some of his friends launched Facebook in 2004. It started in his dorm room in Harvard. Now more than 900 million people are on the social networking site.

AZUZ (voice-over): By the end of this week, you could have a chance to own a piece of the company. Right now Facebook is a private business. But this Friday, it`s expected to go public. That means Facebook will start selling shares of stock.

Mark Zuckerberg and some other company executives have been traveling around the country the past few weeks. They`re trying to figure out how much demand there is for Facebook stock. That`s how they`ll set the price for the company`s IPO. Ali Velshi explains what that is and why this matters.

ALI VELSHI, cnn HOST: The IPO, initial public offering, it`s the first time that a privately held company offers its shares to the public. Now there are a few reasons why they do this. One, they pay off early stage investors. Two, it`s prestigious. But, three, they raise much needed money to expand the business.

Tom Adams was the CEO of Rosetta Stone, a language learning software company which went public on April 16th, 2009.

TOM ADAMS, CHAIRMAN, ROSETTA STONE: The actual IPO day is a fantastic moment for the company because effectively you`ve had to do a lot of work to be ready to go public. It`s a source of enormous pride for everybody.

VELSHI: But before a company can do its IPO, it has to set a price range for the stock and then go on a road show.

ADAMS: You basically get to feel like a rock star for about two weeks. The bankers will put you on a private plane and fly you around and it`s because there`s such urgency to get to as many meetings as you possibly can.

So you sort of go in to tell your story and I think you have to just tell it like it is and very much explain the good and the bad of the company, because these are long-term relationships that your company`s going to sort of have with an investor base. And so you want to hit the right balance.

VELSHI: The ideal process is too complicated for a company to undertake itself, so they hire investment bankers to underwrite it.

ADAMS: So you have essentially all the different banks that you`ve considered come to present to you and you evaluate their assessment of the company and how they would present it and sell it.

VELSHI: The big question? How high do you set the price?

ADAMS: You`re trying to get the range at a level where people will have the conversation. That`s vital. So --

VELSHI: So low enough to produce demand?

ADAMS: Yes.

VELSHI: But high enough that you make money off of it.

ADAMS: Right, so high enough that your incumbent investors, the people who`ve been with you for a long time, will be very happy about the outcome. And so you`ve got to balance the two and, you know, that`s something you just have to get done.

VELSHI: Companies can make a lot of money going public, instant millionaires. You pay off your early stage investors, you`ve got money to expand. But there is a tradeoff. When you`re a private company, nobody minds your business. When you`re public, it`s everybody`s business -- Ali Velshi, cnn, New York.