GFIs1 

FB has seen today the nice price of 20.87... Does anyone know of a company that did a IPO on Nasdaq losing ~50% of the initial price in less than 3 months? Inputs are welcome GFIs1

There most likely are some that have lost that much value in such a short period of time. But none so well known that I am aware of. FB underwriters essentially ripped off investors by pricing so high. It is still way over priced imo.

liquidcci 

FB underwriters essentially ripped off investors by pricing so high.

Investors fleeced themselves by subscribing. No one forced investors to pay those prices.

Underwriters priced it there because people valued it there and they could sell it there. It is not the underwriters fault that people were wrong.

Does anyone knows the link where one can get Detailed Information about the Facebook IPO, like which particular category of investors subscribed how much ? Which category saw most over subscription - Retail Investors, Institutional Investors etc. ? What is the current share holding situation according to the most recent filings that they have made to the exchange.

Thanks

Luger 

Investors fleeced themselves by subscribing. No one forced investors to pay those prices. Underwriters priced it there because people valued it there and they could sell it there. It is not the underwriters fault that people were wrong.

I agree no one was forced and investors were stupid to buy in. But the underwriters have a responsibility to price in a way that does not cause investors to take a 50% haircut in 3 months. To many shares at to high a price equals disaster. I 100% agree everyone had a choice but underwriters did a poor job. I don't agree "Underwriters priced it there because people valued it there and they could sell it there." They priced it there out of greed and on day one people were underwater. Don't think the pricing of IPO's is purely an auction mechanism. The underwriters have a lot of control on how gets priced intially. They were wrong and the market is in process of correcting it.

The underwriters do have a good bit of control. The investors level of control is "Just say no". Underwriters don't want to get it wrong any more than the investors, because they won't get business.

I think if anyone is at fault it is Facebook for not properly disclosing their "real" growth rates. They changed them after the prospectus and the information did not make it to the public before the IPO. Once that information became public, then the valuation got adjusted. To me that looks like Facebook securities fraud. Blame them.

There are 2 phases of importance in an IPO:

1) Before the IPO - the underwriter and the company need to plan a big marketing action to
get the highest attention from future stock holders
2) After the IPO - the company itself needs to proof to have reached some goals pointed out
in the pre IPO forecasts...

In case of FB:
1) Most of the stock buyers lost "some" money - depending on the time being invested
2) FB itself proofed not ONE predicted goal - even the business model is still missing today
3) The underwriters lost "huge" money - as Nasdaq was not operating properly on IPO day.
(Swiss bank UBS is filing Nasdaq of a loss of over 450 million on the opening day, holding too much
stock which was not processed - and some other underwriters may be in the same situation)
4) A "fair" value of the FB stock can not be calculated today - as all the most important pieces
of a "working" business model are not clear for every business partner in the game.

This is a red warning sign for investors for the upcoming IPO's in the dot.com scene.

GFIs1

Faceplant:



Mike

42 - 26 = 16

28 - 16 = 12

Go long at 12?

Luger 

42 - 26 = 16 28 - 16 = 12 Go long at 12?

More like cover short at 12

Mike

FB got put on IB's you can't short this for a day list after earnings. Funny you couldn't get a proper borrow on a stock with a billion share float at a place like IB. lol

Not sure if it made it to the Reg SHO list or not...that would have been even more funny.