10 Biggest Tech Headlines in 2012

Facebook Goes Public
Facebook transformed from a privately-held company to one that is now publicly traded, but the transition had some problems. Courtesy Facebook

For Facebook, 2012 has been an eventful year. In October, the site hit the impressive milestone of 1 billion active user accounts [source: Smith, Segall and Cowley]. Earlier in the year, the social-networking behemoth purchased Instagram, the mobile photo sharing service, for $1 billion. And way back in May, Facebook launched its initial public offering (IPO), becoming a publicly traded company.

Facebook didn't have much choice in the matter. In the United States, the Securities and Exchange Commission (SEC) has rules that establish when a company must switch from privately owned to publicly traded. In general, a company with several hundred private shareholders and more than $10 million in assets must transform into a publicly traded company for regulatory reasons [source: Investopedia]. It was only a matter of time before Facebook became a public company.

The move was not without problems. According to pending lawsuits against the company, Facebook and Morgan Stanley, the chief underwriter for the IPO, failed to warn the public of how mobile browsing would impact Facebook's financials moving forward. Other lawsuits allege that Facebook and its IPO underwriters warned several significant investors of an adjusted financial report that would impact the company's stock price in the short term, but failed to release this information to a wider audience of potential investors.

If true, this would mean that some people had access to extra information before Facebook's stock hit the market. It would also mean buyers might have paid too much for stock simply because they didn't have access to that information.

Whether the allegations are true or not, the price for Facebook stock has seen a dip since opening at $38 per share. By mid-October, the stock price was worth less than $20 per share [source: Google Finance].