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Author Topic: Can anyone tell me what's deal with FB stock  (Read 719 times)
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Soulchilde
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« on: May 30, 2012, 11:15:10 AM »

Did someone intentionally sink this stock? 
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Crux
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« Reply #1 on: May 30, 2012, 12:13:25 PM »

No. They intentionally made it seem worth more than it was, and a lot of people got absurdly rich off the IPO as a result. Other people lost a ton of money off the IPO as a result. Welcome to modern stock valuation - reality is nothing, perception is everything.
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Soulchilde
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« Reply #2 on: May 30, 2012, 12:35:20 PM »

Quote from: Crux on May 30, 2012, 12:13:25 PM

No. They intentionally made it seem worth more than it was, and a lot of people got absurdly rich off the IPO as a result. Other people lost a ton of money off the IPO as a result. Welcome to modern stock valuation - reality is nothing, perception is everything.

okay, so did someone break the law?   Seems like the story is gaining traction
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Crux
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« Reply #3 on: May 30, 2012, 03:12:34 PM »

Quote from: Soulchilde on May 30, 2012, 12:35:20 PM

Quote from: Crux on May 30, 2012, 12:13:25 PM

No. They intentionally made it seem worth more than it was, and a lot of people got absurdly rich off the IPO as a result. Other people lost a ton of money off the IPO as a result. Welcome to modern stock valuation - reality is nothing, perception is everything.

okay, so did someone break the law?   Seems like the story is gaining traction

Early indications are most likely someone did. The good news is, with public tide turned against the big banks and trading firms at the moment something might actually be done about it. Once upon a time everyone turned a blind eye to this kind of thing, but especially given the high profile nature of this instance it's unlikely it won't at least get followed up on.
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Jumangi
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« Reply #4 on: May 30, 2012, 05:42:24 PM »

This is simply a one stock bubble bursting. The Facebook IPO was hyped at level of the 2000's dotcom bust era. They upped the number of shares and the launch price right before the IPO. They got greedy and then the market said no thanks and put what they feel is the real current valuation on it.
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gellar
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« Reply #5 on: May 30, 2012, 09:24:58 PM »

Quote from: Crux on May 30, 2012, 03:12:34 PM

Quote from: Soulchilde on May 30, 2012, 12:35:20 PM

Quote from: Crux on May 30, 2012, 12:13:25 PM

No. They intentionally made it seem worth more than it was, and a lot of people got absurdly rich off the IPO as a result. Other people lost a ton of money off the IPO as a result. Welcome to modern stock valuation - reality is nothing, perception is everything.

okay, so did someone break the law?   Seems like the story is gaining traction

Early indications are most likely someone did. The good news is, with public tide turned against the big banks and trading firms at the moment something might actually be done about it. Once upon a time everyone turned a blind eye to this kind of thing, but especially given the high profile nature of this instance it's unlikely it won't at least get followed up on.

Um, unless I've totally missed something, I really can't see anything illegal here. FB and it's underwriters set a valuation. That valuation missed. Some early speculators are feeling the hit of that. That's the risk of early stock purchases.
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Azhag
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« Reply #6 on: May 30, 2012, 09:34:02 PM »

Only question on legality is if the underwriters got the updated projections from Facebook and passed it to some clients but not all.
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Calavera
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« Reply #7 on: May 30, 2012, 10:08:37 PM »

Quote from: Azhag on May 30, 2012, 09:34:02 PM

Only question on legality is if the underwriters got the updated projections from Facebook and passed it to some clients but not all.

This. At least, this is the argument in the lawsuit.

Pretty sure I saw a ton of press lampooning the $38 price as soon as it was announced. No one thought it was worth that.
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Scuzz
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« Reply #8 on: May 30, 2012, 11:10:31 PM »

This should make the next great IPO of this type much more "realistic" in it's expectations.
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Doopri
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« Reply #9 on: May 30, 2012, 11:28:06 PM »

Quote
This should make the next great IPO of this type much more "realistic" in it's expectations.

thats the same thing i said about junk bonds... then latin american debt funding... then the east asian currency markets... then the tech "boom"... then real estate... then derivatives hedging...

we live in a boom / bust, musical chairs financial world and until we correct that were going to continue to see instances of corru... "misvaluation" that create large sums of money for a small perdetermined few while dumping the inevitable losses off on the majority.  at least this time it was small, which i suppose is a bit like prima nocte being "just" a bj
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Doopri
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« Reply #10 on: May 30, 2012, 11:31:08 PM »

the best part is im sure whoever was responsible for talking up the stock and had the presold shares, made a killing shorting it too
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walTer
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« Reply #11 on: May 30, 2012, 11:40:09 PM »

I lost 90 bucks so far.  My wife asked me to buy 10 shares so she could tell people we have FB stock.  Silly.  I was not planning on it making any money.   BUT call me in 5 years and see where we are.
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Knightshade Dragon
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« Reply #12 on: May 31, 2012, 01:04:42 AM »

This is why I get incredibly nervous about buying stock.  I just feel like it has nothing to do with tangible goods or actual earning potential but instead is based on intuition and hairs on the back of somebody's neck.  If some chicken little screams the sky is falling, the stock price goes with it.
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Doopri
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« Reply #13 on: May 31, 2012, 01:26:24 AM »

which is why its such a shame knighshade - the stock market SHOULD be about providing market based funds to companies lacking liquid assets but with promising future growth due to novel ideas.

at best its become a house of speculative cards and a casino of perception.  at worst its a haven of corruption designed to funnel money to those who are looking at everyones hand.
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kathode
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« Reply #14 on: May 31, 2012, 01:51:58 AM »

You can certainly find quality companies with solid growth in the stock market.  Or even better, don't bother with individual stocks and invest in a solid index fund.  The market is an investment engine and there's never a guarantee that you'll make money of course.  But the overall direction, averaged over time, has been consistently higher and should continue that way as long as the world keeps growing.  IPOs are speculation engines and shouldn't be bought by the average investor (IMO).  The famous advice of Warren Buffett applied completely to the FB situation - "Be fearful when others are greedy."
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Laner
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« Reply #15 on: May 31, 2012, 04:22:39 PM »

Quote from: kathode on May 31, 2012, 01:51:58 AM

Or even better, don't bother with individual stocks and invest in a solid index fund.  

This... buying individual stocks isn't much different from gambling.  Index and decent mutual funds, while not as exciting, are much less risky.
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