Why social network VKontakte postponed access to the exchange

The largest social network in Russia, VKontakte, initially positioned itself as a community of students and university graduates. For several years, the project has become a modern, fast and powerful tool for communicating on the network. Every day, more than 30 million people visit the social network, who have the opportunity to communicate, share photos and videos with their friends. One of the stages of the project development should be access to the stock market.

Entry into the securities market for the VKontakte social network was to begin with an initial public offering of the company's shares. This process, also known as IPO (Initial Public Offering), is used by growing joint-stock companies in order to attract investment and increase assets. However, in the last days of May 2012 it became clear that the planned launch of the VKontakte social network on the exchange would be postponed indefinitely. This was announced in his blog by project manager Pavel Durov.

The social network VKontakte reported on its plans to enter the exchange back in 2011. According to Bloomberg, the project management already in the summer of 2011 was negotiating with investment banks, planning an initial public offering on the New York Stock Exchange. The preliminary dates for the IPO were also determined - the beginning of 2012.

Observers attribute the decision to postpone the entry into the securities market with the unsuccessful participation in the IPO of another large social network - Facebook. FB entered the Nasdaq American Exchange in May 2012 and was marked by scandal. The Vesti.RU agency quoted Pavel Durov as saying that the IPO of the world's largest social network Facebook shook investor confidence in social networks, making investing in them risky.

On the first day of the placement of Facebook shares on the Nasdaq exchange, they were trading at the upper level of the price range, but after a few days the price of securities fell even lower than the initial offering price, which led not only to a reduction in the state of FB founder Mark Zuckerberg, but also to significant financial losses shareholders.

Pavel Durov, who owns a 12% stake in VKontakte, at the end of May 2012 got the opportunity to vote with the securities of another shareholder of the social network company Mail.ru Group, which owned almost 40% of the shares. Thus, now the head of VKontakte has almost complete control over the company. Analysts are in no hurry to make predictions regarding the timing of the transfer of the IPO of the social network. In all likelihood, much will depend on the dynamics of the stock price of Facebook, which will have to restore its market reputation.