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Facebook Opens And...
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Was initially indicated to open at 45, then 42. Opened at 42, climbed to 43 for about a second and has moved under 40 a couple of times.
Zynga down 13% (halted). Social Media etf getting spanked.
Edited: now has broken through 40 and is now nearly breaking 39.
Edited 2: now nearly breaking original offering price of 38.
Edited 3: hit 38 20 minutes into trading. This is not pretty. Anyone want to step in? lol.
Added: Seems to be some defense at 38, but geez, the way it opened I don't know who wants to step in.
Broke 38 very briefly, but now above slightly. Market no likey.
Edited: Now stabilizing under 39, but the amount of selling into the open was pretty remarkable.
Update: CNBC now saying initial fall was due to Nasdaq being "clogged" (lol, and now apparently other technical issues - nasdaq shares down.) Some orders may not have gone through (http://www.zerohedge.com/news/think-you-bought-facebook-think-again), although the sells certainly seemed to go through.
At 38, FB stock was propped up by underwriters who came in to buy.
Back over 40 briefly then under and moving rapidly - 240M shares traded.
11:30 - now moving over 41, but kind of a technical mess at the open. Nasdaq stock now down nearly 5%. -
The first day is not over yet, but so far there is no sizzle to this huge IPO. For those looking to double their FB money in one day, this has to be a major disappointment. With a trailing P/E of 95, and no track record of fast growing earnings, I think this stock is only selling on the cache of its name. Unless the upcoming earnings announcement is a gangbuster, I don't know how this stock will stay up above its IPO price. That said I wouldn't be out there shorting this.
Most of this week the institutions have been selling toward the end of the day. Will be interesting to see if FB drops below $38 before the close. -
Reply to @fundalarm: I'm guessing there is a significant amount of money being used to defend $38 right now. 38 is being defended like it's "Braveheart" or something.
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All of the investment orgasms have already been had by the venture folks and those related to the company from the early days; not unlike eBay IPO's and others. Everyone else must be satisified to just watch and have a cigarette after all of the sounds of pleasure have subsided.
I'm interested in the other worldly events that affect our holdings. -
The rich on wall street who got in early will get richer. Anything new?
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Reply to @Kenster1_GlobalValue: Market down yet again, CNBC ("First in BS Worldwide") again stunned that the retail investor nowhere to be found, NASDAQ having all manner of technical issues that should have been prepared for, the world's biggest IPO evuuurr now being spun as a positive after it had to be propped up and there are apparently sell orders from hedge funds coming in now ...not really.
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Facebook: 70 mutual funds already have a stake
http://money.cnn.com/2012/05/18/markets/facebook-mutual-funds/index.htm
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Reply to @Kenster1_GlobalValue:
GSVC (whose manager was on CNBC this morning all excited) is down 16% on the day, SVVC down a "holy ****" 21%.
"For example, GSV Capital (GSVC), which invests in "high growth" pre-IPO companies, holds 350,000 shares of Facebook. That represents nearly 7% of its $167 million portfolio. GSV Capital also owns shares of Twitter.
Similarly, the $87 million Firsthand Technology Value Fund (SVVC) boasts 600,000 shares of Facebook, representing about 12% of the total portfolio. Online flash-sales company Gilt Groupe is also among the top holdings in the fund." -
Reply to @Kenster1_GlobalValue: Thank goodness that American Funds and American Century don't seem to be among them.
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Many people apparently still have not gotten trade confirmations and a lot of anger. The battle at 38 towards the end of the day was one of the more epic things I've seen in quite a long time in the markets. That was insane and probably cost a fortune to prop up not once but twice today. How much more money is going to be willing to be spent for that in coming days?
"Facebook Flop", "Facebook Unfriended", etc - I can imagine the headlines over the weekend.
SVVC now down 28% on the day. Zynga halted for almost 50 minutes twice, and down 15%.
This can be spun 18 different ways (and is currently), but it will stand as a real disappointment for those who thought this was going to bring the retail investor back. I mean, I went on a walk this morning and heard other people talking about buying at the open while I was walking, people at the coffee place, people at the drug store, etc. How this played out today probably just scared off more retail investors, but I'm really surprised that it played out this badly.
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http://www.reuters.com/article/2012/05/18/us-facebook-idUSBRE84G14Q20120518
(Reuters) - For a company that is dramatically upending business strategies and social relationships around the world, Facebook Inc made a surprisingly modest debut on the Nasdaq on Friday as a sky-high valuation and trading glitches capped the stock's rise.
In late trading, Facebook shares were only a few cents above the company's initial public offering price of $38, after opening 11 percent higher, rapidly heading south to touch their initial price and then rebounding by several dollars.
{...}
But the stock debut took place in a weak market, and traders said the smaller-than-expected first-day pop reflected the very aggressive pricing of the offering and a last-minute, near 25 percent increase in the number of shares being sold. Analyst predictions of first-day gains had ranged from 10 percent to 50 percent.
"The increase in size was a big negative factor for us," said Tim Ghriskey, chief investment officer at Solaris Asset Management, who said he canceled some orders for the shares.
The IPO price was equivalent to more than 100 times historical earnings, compared with Apple Inc's 14 times and Google Inc's 19 times. For many investors that makes it a risky bet.
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Nice injection for cash-strapped California:
"Already, the influx of wealth arising from Facebook's extraordinary growth has helped drive a mini-boom in San Francisco Bay Area real estate, and income tax revenues related to the IPO will cut the state of California's budget deficit by an estimated $2 billion."
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What do you guys think? A PE of 100 for Facebook is too high?
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Reply to @Kenster1_GlobalValue: Let me say this: might FB become something more over the next decade? Sure. I think it needs to be about more than chatting with people about what you just ate for lunch and more of a "hub".
That said, I thought it would open in the mid-40's and push maybe mildly over $50. Maybe once the dust settles, it comes down from there. The fact that the underwriters had to defend 38 not once but twice is stunning.
Technically this was a mess (people still not getting confirmations), PR-wise this is a mess and I'm guessing the retail investors who actually did buy are likely not too excited going into the weekend.
The story does, at least for Jamie Dimon, take the headlines away from JPM (down again, along with C and AIG and a number of other financials) briefly.
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I'm sure there were some purchases of FB from the High School investment clubs.
"Like" !!!
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Reply to @Kenster1_GlobalValue: "Meanwhile Theophilus Hodges, a 36-year-old property manager, stopped into an E*Trade branch in downtown Chicago on Friday morning specifically to open an account to buy Facebook shares, he said.
"If it wasn't for Facebook I wouldn't be here," he said as he left the branch to go to his bank and transfer money into his new account. "I missed out on Groupon GRPN -6.69% when it went public, so I'm not going to miss the boat this time."
Journal Community
Mr. Hodges said he plans to invest $10,000 in Facebook shares—including $4,500 of his own money and $5,500 from his mother."
http://online.wsj.com/article/SB10001424052702303448404577411903118364314.html
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Reply to @scott: But hey why not right? Didn't Apple and Google surge to over $500 a share? LOL.
Is everyone saying that Facebook won't monetize and dominate the new future of global social & marketing advertising genre - so to speak - and not be able to rise to a PE of 200 so that investors will be able to make some serious money?
Is Mark Z. not the Steve Jobs of Social Media Networking and who can turn a $38 stock price to $300+?
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Personally I don't share the bullish viewpoint as the professionals on Facebook. Comparing FB to Google or Apple is like apples (no pun intended) and oranges comparison.
From article below, "...skeptical advertisers, a young management team about to become amazingly rich, a history of social-network flameouts, deep-pocketed competition and the privacy issue."
http://online.wsj.com/article/SB10001424052702303879604577408724178786822.html?mod=mktw#printMode
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Reply to @Sven: Sorry, I was actually speaking with a tongue-in-check. I didn't seriously mean to compare FB to say Apple (and they are also very different from a stock valuation perspective - PE 100 versus PE 14).
Poking fun at the idea that FB will have world domination and the PE will rise further to nose-bleed and oxygen-mask territory.
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Reply to @Kenster1_GlobalValue: It is interesting to watch on the sideline while the underwriters are complaining on the lack of retailed investors. Maybe people are a lot smarter than they think.
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Reply to @Sven: CNBC continually said that a larger-than-normal portion of the IPO was allocated to retail. So:
A:) Retail investors puked it up. For a name that everyone was supposed to be excited about, everyone sure sold it in a hurry.
B:) There's a lot of retail investors who are still holding and are probably pissed.
C:) Actual allocation to retail is less than being said.
D:) There may have been a lot allocated to retail for the IPO, but once the stock opened, the majority who wanted shares had them and without buying interest, selling resulted in more selling.
Maybe a combination of the above or something else.
The two private equity funds down again - GSV Capital (GSVC) down 36% in 5 days. Firsthand Tech Value (SVVC) down about 34% in 5 days, and that would have been down further had it not announced NAV today. -
Close to a 10% drop today --- trading at over $34.
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http://www.telegraph.co.uk/finance/newsbysector/mediatechnologyandtelecoms/9277128/Banks-move-in-after-shaky-start-to-Facebook-IPO.html
"Facebook’s banks ended up owning 86% of the social networking site’s $16bn (£10bn) initial public offering after a lacklustre first day of trading in which shares ended marginally up on the opening price."
"As the first analyst to place a “sell” rating on the company emerged over Facebook’s $100bn (£63bn) mega-float, filings from the company revealed the true extent to which Wall Street underwriters were forced to prop up the shares on Friday.
A revised S-1 filing made with the US Securities and Exchange Commission disclosed that Facebook’s five key banks ended up owning $13.86bn. Morgan Stanley, its lead adviser, ended the day owning 162m shares, worth £6.16bn, followed by JP Morgan and Goldman Sachs, which ended the day with $3.2bn and $2.4bn holdings respectively. Bank of America Merrill Lynch and Barclays Capital each held $1.04bn stakes.
A significant proportion of the shares owned by the banks will have been bid for ahead of the float itself, as part of the banks’ underwriting duties, but a smaller proportion will have come from a result of the banks moving into the market on Friday to maintain the price above its $38-a-share opening level."
http://www.cnbc.com/id/47505908
"All the buy-side institutions are shorting it. You can get a borrow on it and everyone's leaning all over it. There's no bottom," Rovelli says. "The next catalyst is going to be earnings, which is three months away. So there's no reason to jump in here."
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Talk to your kids, they are moving rapidly away from FB to other things. Older people will hang on to its use for a while. It is no longer a rocket science concept and navigation through there site is cumbersome, and all improvements disappoint the users to the point they complain and many move on to other things.
FB at nearly 100 times earnings and dropping! What are you buying? Something that in a year few will be using? Safer to bury your money in the backyard. -
I guess some retail investors who bought in early missed this memo?
http://www.marketwatch.com/story/morgan-stanley-cut-facebook-view-before-iporeport-2012-05-22
NEW YORK (MarketWatch) -- The consumer Internet analyst at Morgan Stanley, the lead underwriter for last week's Facebook Inc., trimmed his outlook for the social-networking firm's revenues just days before the deal went live, Reuters reported Tuesday. The report said that the action, which it said was relayed to some of Morgan's major clients during Facebook's pre-IPO road show, came as a surprise to many potential investors so close to the stock's debut. Reuters explained that the cut came after Facebook released an updated prospectus ahead of the share sale that cautioned about revenue-growth challenges presented by a shift to mobile devices.
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The SEC is already investigating the trading mishaps on the opening day of trading. Should the SEC expand their investigation to a lack of disclosure of material facts to the smaller investor, while the big banks and brokers got the news about the bankers estimated earnings cuts? Wall Street continues to be the wild west for the small investor, despite the major financial reform bill passed last year and scandals that unfold decade after decade.
Article by Henry Bloget: http://finance.yahoo.com/blogs/daily-ticker/facebook-bankers-secretly-cut-facebook-revenue-estimates-middle-133648905.html
"Reuters' Alistair Barr is reporting that Facebook's lead underwriters, Morgan Stanley (MS), JP Morgan (JPM), and Goldman Sachs (GS) all cut their earnings forecasts for the company in the middle of the IPO roadshow."
"But, just as important, news of the estimate cut was passed on only to a handful of big investor clients, not everyone else who was considering an investment in Facebook."
"This is a huge problem, for one big reason:
Selective dissemination. Earnings forecasts are material information, especially when they are prepared by analysts who have had privileged access to company management. As lead underwriters on the IPO, these analysts would have had much better information about the company than anyone else. So the fact that these analysts suddenly all cut their earnings forecasts at the same time, during the roadshow, and then this information was not passed on to the broader public, is a huge problem.
Any investor considering an investment in Facebook would consider an estimate cut from the underwriters' analysts "material information." "
Part of the problem may point directly to the SEC regulations that defines the quiet period and how it is suppose to work. But that quiet period should not be an excuse not to release material information.
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Hi Maurice- Well, what exactly do we mean when we say "small investor"? After all, I'd think that many of the folks here on MFO are "small investors". "Small" does not equal unqualified, ignorant, nor stupid.
It's pretty hard to believe that many of the so-called "small" investors so frequently mentioned are not of the same breed that thought that they could beat the housing bubble. Hey! Easy money! A quick buck! No experience, thought, judgement, or knowledge needed! Step right up, folks, see the painted lady!
Mo, you most likely think that because I am a "liberal" (whatever that's supposed to mean) I am of the mindset that "the gummint" should be right there at all times to watch over each and every one of us. No sir, I don't. To me, there's a big difference between sophisticated "professional" financial ripoffs, utilizing disinformation, co-option of regulation, of a size and managed in such a manner as to potentially require taxpayer backup in case of failure, and a plain old carny game like the Facebook IPO.
An excerpt from a ⇒ Reuters article:
"As bad as the declines have been, though, a view persists that the stock remains overvalued.
Monday's closing price of $34.03 implied a 24 percent annual growth rate for Facebook earnings over the next 10 years -- a rate that would rank above 90 percent of the companies in that industry.
Thomson Reuters Starmine, meanwhile, more conservatively estimates a 10.8 percent annual growth rate -- almost exactly the mean for the technology sector -- which would value the stock at $9.59 a share, a 72 percent discount to its IPO price."
With investing, nothing's easy. You know that, I know that, and so does every single MFO poster or reader. If investing was easy, there would be no need for MFO.
Emptors still need to caveat. That's life.
Regards- OJ
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Reply to @Old_Joe: I don't think Maurice meant anything by it. If you'd rather, the "retail" investor was hurt by the FB debacle in a number of ways. The retail investor who didn't want anything to do with Facebook is increasingly finding the odds further out of their favor for a number of reasons, as well.
CNBC had a retail investor on the phone earlier (his title was, literally, "retail investor") who cancelled and adjusted some orders on Facebook on Friday when it opened - older guy, retired. Thought he'd cancelled his orders until later on that day he finds that an order actually did go through. Monday morning comes around and another chunk of shares he'd thought he'd cancelled appears.
"With investing, nothing's easy. You know that, I know that, "
Um, ok. Well, you have a financial media that presented Facebook as a lottery ticket for a month or two in advance of this. "THE SOCIAL OFFERING", blah blah blah. You know nothing comes easy, I know nothing comes easy, Mo knows. Many people here know.
However, I point you in the direction of a post I did earlier in the thread:
Reply to @Kenster1_GlobalValue: "Meanwhile Theophilus Hodges, a 36-year-old property manager, stopped into an E*Trade branch in downtown Chicago on Friday morning specifically to open an account to buy Facebook shares, he said.
"If it wasn't for Facebook I wouldn't be here," he said as he left the branch to go to his bank and transfer money into his new account. "I missed out on Groupon GRPN -6.69% when it went public, so I'm not going to miss the boat this time."
Journal Community
Mr. Hodges said he plans to invest $10,000 in Facebook shares—including $4,500 of his own money and $5,500 from his mother."
http://online.wsj.com/article/SB10001424052702303448404577411903118364314.html
___________________________
So no, not everyone knows, as the unfortunate story above illustrates - and I'm not meaning this in an insulting fashion, but there were probably many other people who did the same and had the same thought. (Additionally, I remain curious on what he believes he missed out on with Groupon.)
People believed they could make money with THE BIGGEST IPO EVEERRRRR. These people are not "ignorant or stupid", but they may have been caught up in the hype and didn't do their homework. There were rumors of people putting in limit orders of $65-70 before FB came to market because people wanted it at whatever cost.
You have a stock that was framed with EVERY SINGLE DISCUSSION as a way to "get the retail investor involved." As a "PR" move to interest the retail investor, this is nothing short of a disaster.
Morgan Stanley's actions should be investigated and the technical issues with the Nasdaq just seem worse and worse as more stories come out. The technical issues with the Nasdaq just seem insane.
Someone on CNBC was joking that Facebook was "Muppet Bait", referring to the Goldman term in the story that came out months ago. Many retail investors, whether they didn't do their research on FB or whatever anyone wants to say, feel like that's true now. Again, every single discussion of this was attracting the retail investor - and the result was an absolute mess.
FB now at $30.95.
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Hi Scott- If I came across as picking on Maurice, I'm sorry- I really had no intention of that. No quarrel with Mo- I was simply using his post as a vehicle to examine the general concept of the so-called "small investor".
I surely agree that any issues involving losses or problems due to the technical issues needs to be thoroughly investigated, and if warranted, made right.
It was your example of Theophilus Hodges that led me to express my opinions as I did. Frankly, I think that Mr. Hodges was completely unqualified to be making the bet (and it was a bet, not an investment) that he did, and while of course he has the right to do so, it's completely his business and his problem. If he "didn't know" exactly what he was doing, maybe he learned a well-needed lesson in life.
"you have a financial media that presented Facebook as a lottery ticket for a month or two in advance of this."
Exactly. You buys your ticket, you takes your chances. If you confuse a lottery ticket with an investment, maybe you have no business buying either one. -
Reply to @Old_Joe: No, I didn't think you were picking on Maurice - I do think it's interesting you mention "qualified", as that's often the term given to large/institutional investors who have enough to invest in hedge funds and other such things (although "accredited" is now often used, too, maybe to not imply that someone without enough money to get into hedge funds is "not qualified".)
I do think the average person needs to do their homework when dealing with investments, but people are looking to make a buck quickly, and I think it speaks to the increasingly short-term mentality of investing in general. People don't do their homework, go for what's hot (instead of looking at what's been tossed out), etc.
The other issue is that you have issues where people get into risk because they are forced into because you have interest rates at zero. Most seniors seem to not be running into risk despite lowered interest rates, but I'm sure there are some that are. I think everyone is rushing for yield, and I think there is the risk in cases where people are looking at the yield and not looking at the fundamentals or risk. I've now seen MLPs described as "defensive" or "conservative" a few times, and that's completely wrong.
There's also the lack of fiscal education in this country which is troubling -personally, I've continued to say that Home Ec should include a significant amount of financial education in High School. You get people who really love Facebook and what it's all about, but may genuinely not be able to take valuation into account.
Also, now this:
'Nanex ~ 22-May-2012 ~ Nasdaq Radio Silence
On May 18, 2012 beginning at 11:29:52 and continuing for almost 17 seconds until 11:30:09, quotes and trades from reporting exchange Nasdaq for all NYSE, AMEX, ARCA, and Nasdaq listed stocks completely stopped. In exchange-speak, 17 seconds is 17,000,000 microseconds - an eternity by HFT standards. It's amazing no one noticed.
This was immediately before Facebook began trading."
http://www.zerohedge.com/news/nasdaq-lying-about-what-it-knew-facebook-ipo-day
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"Home Ec should include a significant amount of financial education in High School".
Scott, I've been hollering about this for at least fifty years. We have high-school graduates who have no idea what a checking account is, what happens if you take out a loan, nor the most basic survival facts of economic life. If schooling isn't to help prepare young folks for real life, then what exactly is it for? To pass some arbitrary set of tests designed in Washington?
Don't get me started on that... -
Reply to @Old_Joe: Any single word or phrase generally has a number of meanings or "shades" of meaning. Also, meanings change over time. Growing up before 401ks and the like, only a fortunate few in our community would have been considered "investors" of any stripe or color. Too busy putting food on the table for growing families. (That's back before defined benefit pension became a 4-letter word to some and Social Security became a "entitlement".) I'd say that a small investor is a "do-it-yourselfer" - someone who pretty much runs his or her own show - though may rely on a commission-based advisor or insurance salesman for advice. Suspect that most who can afford fee-based and hands-on money managers probably don't fit the mold of "small investor." Also suspect 90%+ of those who post here are - almost by definition - small investors, though likely better informed than the lot. I have in the past decried the loss of private and public pensions. In a sense, the public was bought out into acquiescence by the promise of an even bigger "pot of gold" via 401Ks, IRA's, etc ... 2008 taught that what sounds too good to be true probably is ... I see Meg is laying off around 8.5% her workforce. As a small investor I should applaud. HP jumped nearly 10% after hours. My small stake at Dodge & Cox will surely benefit. Per Rono & Billy Pilgrim - "So it goes."
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Hi there Hank- I also suspect that "90%+ of those who post here are - almost by definition - small investors, though likely better informed than the lot", and that's really the main point that I was trying to make. We come here, aware of our ignorance in some areas, and try to educate ourselves before we make financial decisions. We have the benefit of being able to draw upon the immense base of collectively acquired experience which is MFO, and we know that none of this is "easy".
I'd be amazed if any of our regular MFO posters were to be found at a broker's office clamoring to "get in" on the Facebook Fiasco (FBF). I just find it very hard to feel a lot of sympathy for anyone who got burnt in the FBF, as they may in fact be "small", but in my estimation they are not "investors", but speculators of various degrees of ignorance or stupidity. (cf: housing, "bubble")
As we now know, there were a whole lot of irregularities in the FBF, and in every instance where someone was mistreated by "system malfunctions" I would hope that they can be made whole. That is an entirely separate situation, distinct from the issue of FB being a gamble vs an investment. As FundAlarm succinctly says, below: "Like anyone was buying FB shares based on their financials!"
Exactly. If you placed an order at 38 and successfully obtained your shares, then don't complain if they are now at 32. “'I thought it would be fun to get in on the initial frenzy,' said Linda Lantz". Well Linda, you didn't invest, you gambled, the wheel was rigged (surprise!), you lost (surprise!), that's that. Welcome to real life. Don't do that anymore.
Take care- OJ -
Reply to @Old_Joe: Hey OJ - didn't think my rambling morning sermon deserved such a well-reasoned thoughtful response, but thank you for taking the time. Haven't followed the Facebook issue or thread too close. Summer in northern Michigan being far too brief & many things to do. Yep - you are correct about members of tne board being highly informed & learning from one another. I do believe that other factors in addition to dollar amount differentiate various types of investors. In some communities or families, 100k would be considered an enormous nest egg to have aquired. In others, a pittance. Guess that's why I submitted a somewhat different definition for "small investor". Thanks for your many constructive contributions on the board. Always a pleasure to read your posts, hank
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Reply to @Maurice: If the quiet period is an excuse they would like to use, then the big investors should not have received this information either. They broke the regulation either way. There is no easy way out for underwriters for this. But most likely and as it always happens they will pay a small fine to settle and assume no guilt.
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5:30p
BREAKING
Facebook's Zuckerberg sells 30.2 mln shares
5:30p
Facebook director Thiel sells 16.8 mln shares
5:45p
BREAKING
Nasdaq says should have nixed Facebook IPO: WSJ
marketwatch.com
Also: "MASSACHUSETTS SUBPOENAS MORGAN STANLEY OVER FACEBOOK
MASSACHUSETTS SEEKS MS COMMENTS TO INSTUTIONAL INVESTORS ON FB
MASSACHUSETTS SUBPOENAS MORGAN STANLEY OVER FACEBOOK COMMENTS"
Nasdaq sued:
http://www.reuters.com/article/2012/05/22/us-nasdaq-facebook-lawsuit-idUSBRE84L18S20120522
And finally, California should have been maybe warned not to count on Facebook so much:
"California's budget could take a hit if Facebook's stock price keeps sliding.
Gov. Jerry Brown estimated the state will generate between $1.4 billion and $1.9 billion over the next 13 months from taxes related to sales of Facebook stock. The estimates were based on prices at $35 per share.
Facebook went public Friday at $38 per share but was trading below $32, or 15 percent below its IPO price, on Tuesday afternoon.
Deputy Legislative Analyst Jason Sisney says the "potential hit from Facebook's share price is nothing compared to the potential damage from a broader stock slump.""
http://abcnews.go.com/Technology/wireStory/calif-worries-facebook-lead-stock-slump-16406731#.T7wgHEVAYig
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I didn't take any comments made above as to be "picking" on me. I think this is a very healthy discussion.
OJ, you asked me what I mean by small investor. I really don't have a specific definition. Even when the Wall Street financial services companies and the financial media use the term "small company", their definition assuming it is agreed upon, constantly changes over time. For the purpose of my comments above about small investors, I suppose I could say that I intended it to mean anyone who would not get Facebook shares or other popular issues at the IPO price. That would mean buying on the secondary market, even if the first day. Saying that, I realize in the case of Facebook, even some larger investors had not received the new financial disclosures about the estimated earnings until after they bought.
As to anyone being unqualified, ignorant, or stupid, those are not terms that I used. Certainly some investors large and small intended to flip Facebook to make a quick buck. But the point of my reply to this post and the link provided, has to do with fair disclosure. In this case someone who is not on the inside with the investment bankers, could be ignorant as they don't have relevant information.
There is more that I wish to say, but I am having problems uploading. Perhaps there is a limitation per thread that I am bumping up against. -
Hi Maurice- No sir, you certainly did not use or suggest those terms- that was 100% me. My observation is simply that "investors" such as Mr. Hodges most likely wouldn't recognize "relevant information" if they received a personal registered letter from Morgan Stanley two months in advance of everyone else.
Take care- OJ -
Some of your average Americans trying their luck with Facebook stock....
http://www.bloomberg.com/news/2012-05-24/facebook-investor-spending-month-s-salary-exposes-hype.html
Facebook Investor Spending Month’s Salary Exposes Hype
=====================================
Ryan Cefalu, who lives with his wife and two kids in Baton Rouge, Louisiana, saw in Facebook Inc. (FB)’s much-anticipated initial public offering a chance to buffer his retirement fund. His expectations fizzled along with the stock within the first minutes of trading.
“It’s disheartening to know that things get over-hyped,” Cefalu, a 34-year-old data-systems manager who spent about $4,000 on the stock, said in an interview. “That’s about a 12th of my annual income -- so a month’s salary. I’m trying to do an on-my-own retirement kind of thing.”
{...}
“I thought it would be fun to get in on the initial frenzy,” said Linda Lantz, an online marketer in Granite Bay, California, who bought 100 shares. “Now it makes me think ‘Oh god, should I bail or is it going to come back?’”
{...}
Michael McClafferty, a freshman finance major at Michigan State University, saw his “first big investment” turn into a $3,000 loss when he sold the shares at $35.
“I didn’t want to lose more,” McClafferty said. “I didn’t know what to do.”
{...}
“Short term fluctuations don’t bother me,” said Charles Landry of Sacramento, California, who bought 1,000 shares on May 18. “Facebook has the potential to be, in the long term, one of the iconic companies in Silicon Valley, a la Google, a la Apple.”
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Reply to @Kenster1_GlobalValue: This is what I thought was pretty remarkable in the article and there are a LOT of people - including a number of them calling into CNBC over the last few days - saying this happened: "The 19 year-old student estimates he spent $8,000 more than he wanted to while repeating orders that wouldn’t go through on the first day, and failing to cancel them because of the technical problems."
It's no wonder there were rumors of Facebook transferring their listing to the NYSE yesterday afternoon. The technical problems like the one above are horrendous - if what happened to Facebook price-wise was disappointing to retail investors, imagine how disappointing it is to guys like this (his "first big investment", no less) who thought they cancelled a bunch of times and then wound up with the shares later that day or even after the entire weekend. -
Mark Cuban Buys 150K Facebook Shares For 'Trade,' 'Not An Investment'
http://blogmaverick.com/2012/05/23/facebook-ipo-post-mortem-killer-but-not-for-the-reasons-you-think/
"1. Say goodbye to the individual investor on Wall Street. Whatever positive impression they had of the IPO market and the stock market in general was just torched to the ground. When everyone you know associated with the stock market is telling you and the media is confirming that this could be a huge IPO that will make money for those lucky enough to get shares and the opposite happens, goodnight. All confidence in the stock is destroyed. Put your money in the bank or if you want to gamble, at least slot machines in Vegas pay out 98pct."
"4. Mobile is going to crush Facebook. The logic for Facebook’s price decline is that they have a problem in mobile. They can’t offer all the games they can in a browser. They can’t offer the same ads or branding opportunities. All true. Bottom line, if you think mobile will displace online usage from PCs then you should immediately short Google and other ad plays and buy TV stations and networks. If you can’t buy an ad effectively on mobile and no one is using a PC to connect to the internet any more, then the only way to reach an audience is going to be via good old tv. And all that over the top video noise, forgettabout it."
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Facebook announced an acquisition within the last week to try and change their model in the mobile space. They fully understand what their challenges are, and it is not reasonable to expect that they are going to just give up. Whether they can pull it off or not, that is what everyone wants to know.
http://www.pcworld.com/printable/article/id,255850/printable.html
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What would happen if FB wasn't free? tia
