|
|
|
|
|
| | SEC, FINRA call for probe of Facebook IPO as stock slidesPage 1 of 2 (1, 2) |
http://www.theglobeandmail.com/globe-investor/facebook-stock-hit-again-as-valuation-doubts-rise/article2439751/
Facebook’s (FB-Q31.00-3.03-8.90%) shares fell sharply again on Tuesday and two top U.S. financial regulators called for a review of the circumstances surrounding its troubled initial public offering last week.
The separate calls for review, by Securities and Exchange Commission Chairman Mary Schapiro and FINRA Chairman Rick Ketchum, added pressure on the company, its underwriters and the Nasdaq, all of which have taken blame for the stock’s harried opening and subsequent sharp decline.
After Friday’s nearly flat close and Monday’s 11 per cent plunge, Facebook shares were down 5.9 per cent at $32.01 in mid-afternoon trading. At that price the company has shed more than $16-billion in market capitalization from its $38-per-share offering price last week.
Volume was again heavy, with 74 million shares changing hands. That followed turnover of 168 million shares Monday and 581 million on IPO day.
With Facebook shares all but impossible to sell short, investors have sought out almost any related vehicle to bet against the social network. Over the past three trading days, prices plunged on two closed-end funds that owned pre-IPO shares. Firsthand Technology Value Fund (SVVC-Q19.590.904.82%) and GSV Capital Corp. (GSVC-Q11.60-0.26-2.19%) both dropped more than 25 per cent even though their Facebook holdings make up only a small fraction of assets.
| |
|
| |
| |
| SEC, FINRA call for probe of Facebook IPO as stock slides
Posted: 5/23/2012 5:39:47 AM | another example of Wall Street fraud. they over hyped Facebook's overall value, not taking into account that new memberships have declined. when the economy is in such a rapid decline, throwing your hard earned cash at this money pit is such a mindless en devour with too much risk. by Tuesday, May 22 FB stock has already plunged by 8%. Zuckerberg already sold off 30 million of his own shares in an illegal pump & dump scheme that will soon be investigated.
rumors have always swirled that FB was in part a CIA/FBI database program to track our movements & collect info on us. that not withstanding, most media sites go popular for a couple years then die off. Zynga games are in part responsible for the steady high account numbers but even they are close to falling apart financially. they had a good run, but i think FB is nearing it's end
if you need any more proof this is a scam, CEO Marc Zuckerberg is the grandson of David Rockefeller. His real name is Jacob Greenberg. If you want to know the truth, just follow the money... | |
|
| SEC, FINRA call for probe of Facebook IPO as stock slides
Posted: 5/23/2012 10:00:21 AM |
if you need any more proof this is a scam, CEO Marc Zuckerberg is the grandson of David Rockefeller. His real name is Jacob Greenberg. If you want to know the truth, just follow the money.
Yup, because if I was related to the Rockefellers the first thing I'd do would be to change my name to Zuckerberg . | |
|
| SEC, FINRA call for probe of Facebook IPO as stock slides
Posted: 5/23/2012 10:26:50 AM | Hey creative.......
You wrote:
"rumors have always swirled that FB was in part a CIA/FBI database program to track our movements & collect info on us. that not withstanding, most media sites go popular for a couple years then die off. "
It didn't take long for the tin hat crowd to fire up its conspiracy mill.............. If the CIA/FBI are involved, then they are as daft as some of the things that you paste.... I guess they didn't figure out that FB is VOLUNTARY...... I am not on it, but I would bet big money that you are, and now you are complaing that someone has all the information that you VOLUNTARILY put on your FB page.
If Zuckerberg is the grandson of David Rockefeller, why did he have to borrow $1,000.00 to start FB?
Paul K | |
|
| SEC, FINRA call for probe of Facebook IPO as stock slides
Posted: 5/23/2012 3:56:36 PM | On a related note- Trading in the North American stock market has been falling for the last 3 years.
See http://www.nytimes.com/2012/05/07/business/stock-trading-remains-in-a-slide-after-08-crisis.html?pagewanted=all
Because of things like the Facebook IPO, JP Morgan, Bernie Madoff and the subprime mortgage securities crisis, many are turning away from the stock market. There's too much uncertainty, and its getting to appear that the market has turned into one big casino and "the house" always wins. At least at the casino, you know the odds (if its fair and honest).
Its just more evidence that the markets need to be fixed. The small retail investors, pension funds and small time investors are pulling out for the safety of bonds or the potential of off shore markets. If the average investor doesn't believe he's getting a fair deal and a reasonable chance, they're going to go away. | |
|
| SEC, FINRA call for probe of Facebook IPO as stock slides
Posted: 5/23/2012 4:01:30 PM | ^^^I read that casinos are more reguated than the markets, and their payouts are now higher because of competition.
Anyone who thought Facebook's should have $105Billion valuation and bought the stock probably needed to be taught otherwise the hard way. | |
|
| SEC, FINRA call for probe of Facebook IPO as stock slides
Posted: 5/23/2012 4:44:42 PM | ^^^^ That true. The casinos know your victim oops customers need a little taste of success to keep them coming back.
The whole IPO thing has kind of lost its luster due to too much hype and backroom gaming. But if a lot of new investors got stung, they'll be left with a bad taste in their mouths about stocks in general.
I think everyone feeling a little edgy about the market and ready to pull out the knives as soon as something looks fishy. Kinda of like the Wild West or a drug deal gone bad. | |
|
| SEC, FINRA call for probe of Facebook IPO as stock slides
Posted: 5/23/2012 4:54:16 PM | OMG!!! Can someone stop the madness!! Freakin conspiracy theories aren't needed here, the facts are bad enough.
I posted on another thread the day before, that the sheeple would get sheared! Since most don't understand how the market works, buying something you don't understand, know how to value, or bother to read all the available information...having a good feeling about a product you use for fun and contact with your friends, hardly qualifies you to throw down money and say "spin the wheel"!
After the initial prospectus is issued, a series of addendums can and usually are issued. They explain further developments for the company, in this case, the last one identified both a fall off in the rate of new membership. More important was the fact that FB, has no footprint in the phone app market. Further it is being discussed that there maybe some issues with ads, that could be displayed on the mobile app.
The value of the company was more or less, set at 100 billion dollars, which would represent a 24 times earnings multiple. Google has only a 14 times multiple, while enjoying a much greater cash flow and earnings per share.
Now comes the problem with the first day of trading, Nasdaq has a different model of trading than the NYSE. Additionally high frequency traders entering numerous limit orders, than cancelling them or cancelling and replacing them with different limits, created a jam in the system. That jam caused many clients to not get reports until later in the day, if at all that day.
This last problem, is part of the issue being investigated by the SEC with the actions of the Nasdaq market place and Morgan Stanley the lead underwriter.
Other problems Morgan faces is whether the banker set the price at the right valuation. A good valuation is one where the stock rises slightly from the issuing price, in this case $38 a share, and stays there for the intial days of trading. Too high a price(or to high a company value) and the price will decline, to low a price(to little value for the company) and the price will shoot up, making the company feel it left too much value of the company on the table.
"CEO Marc Zuckerberg is the grandson of David Rockefeller"
A quite irrelevant fact, which has nothing to do with how the bankers set the price, or how the market reacted to it.
"Zuckerberg already sold off 30 million of his own shares in an illegal pump & dump scheme"
This is the kind of tinfoil hat thinking that makes people believe that anyone can play shenanigans with the market because they feel like it. I don't know if this poster is talking about stock sold well before the IPO or merely what he sold of his own holdings ON theIPO. Additionally there is what's called a "lock up period" for insiders, which is what Zuckerberg would be as largest shareholder and CEO. His personal holdings will be subject to a 90 day period from the date of the IPO, where he CAN'T SELL A SHARE!
There was no pump and dump, he did not trade illegally, or is subject to fines and maybe worse.
Please stop posting false information. | |
|
| SEC, FINRA call for probe of Facebook IPO as stock slides
Posted: 5/23/2012 6:27:12 PM | ^^^^^^
I was waiting for you to get here and set us straight. I didn't really think it was the Bilderbergs or the Illuminati either- LOL. - but close enough.
I remembered your sheep shearin talk too. Dead on the mark.
So I guess the only really issue is "Why was the initial price so far off?" Seems the SEC finds it a little strange. But I suppose they're a little under the gun to find some evil doers these days too- at least ones they can prosecute.
Does all this signal that folks are a little jumpy these days and there's maybe a little lack of faith in the integrity of the market?
I think so. No buy and hold now. The rule is like the old McDonalds commercial- "Keep your eyes on your fries!" or they'll be gone.
Seems there a few too many Ham- burglars around lately. | |
|
| SEC, FINRA call for probe of Facebook IPO as stock slides
Posted: 5/23/2012 7:22:06 PM |
The value of the company was more or less, set at 100 billion dollars, which would represent a 24 times earnings multiple. Google has only a 14 times multiple, while enjoying a much greater cash flow and earnings per share.
I'm curious where tht info came from, it doesn't sound right to me. Here is an article from a year ago when Goldman Sachs got into the Facebook game....and you just knew there was trouble or bank robbery in the works....
The recent news that Goldman Sachs (GS) has valued Facebook at $50 billion has been plastered everywhere, and rightly so. Giving Facebook that valuation puts it amongst the likes of American Express (AXP), Kraft (KFT), and Boeing (BA).
That's a big deal for any company, let alone one that's just over six years old and was started by a few college kids. And because it's such a big deal and the price of Facebook's shares have more than doubled in the past year, investors are salivating at the thought of owning a piece of this newly-minted tech titan and striking metaphorical tech gold.
From a few perspectives, that makes a lot of sense:
Facebook has changed the way we communicate and as a result, will probably be woven into the fabric of society for years to come. Hence, why many have called it the "Second Internet".
Facebook has over 500 million users and it's growing at an enormous rate. That's a huge audience if you can properly monetize it.
In 2010, Facebook had $1.2 billion in revenue for the first nine months of 2010, resulting in $355 million net income (source).
There's just one small hitch. And, by small, I mean big:
Facebook is absurdly overvalued.
One analyst, Ryan Jacob of the Jacob Internet Fund, estimates that in 2010, Facebook achieved $500 million in Net Income.
At Facebook's current $50 billion valuation, that puts its Price to Earnings Ratio at ~100. That is insanely high.
That same ratio applied to Apple's (AAPL) $14 billion in Net Income for 2010, makes Apple worth $1.4 trillion; American Express (AXP) would be worth $213 billion and it pegs Kraft (KFT) at $302 billion.
Basically, I find it difficult that its value has doubled since GS got in last year and gave what back then was considered outrageous valuation. | |
|
| SEC, FINRA call for probe of Facebook IPO as stock slides
Posted: 5/23/2012 7:27:14 PM | Ahhh Dspiral...alas trading is a science, but not an exact one...especially for those closest to it, or financially at risk or involved. On top of that are emotional issues. Some of you may even find this funny. Among my several episodes involving my personal 15 minutes of fame, was a very brief bit part in the movie "Wall Street", where the broker asks how much is for sale in the BlueStar crowd, and he makes a bid and all of us yelled SOLD!
The reason for my bringing that up is that right around that part of the movie Bud Fox tells Gekko, "don't get emotional about stock"! The problem is EVERYONE gets emotional about money, especially their own.
During the proceeding weeks of the IPO of FB, the talking heads were all about how this was going to be the biggest, the bestest, of all IPO's for the next few years..talking about the company's sucesses. No one was dogging the stock, nobody wanted to appear a fool on national TV, nobody wanted to rain on the parade of Facebook to the marketplace.
Some of you might want to blame the brokers! To that, I'll ask a question! How many real estate brokers, or realtors dogged housing prices during the last half of 2007, or the first half of 2008? No you walked in and they painted a rosy picture of the last 3 years of almost 20% gains EACH year!!
"Why was the initial price so far off?"
Just like housing, there has to be buyers and sellers, for each of those 500+ million shares sold that first day, there had to be a buyer. The company sold very little stock, compared to the number of insiders(people who already owned the stock) that day. When insiders sell, and not hold on an IPO, it ain't a good sign.
I knew people that day who entered orders to buy the stock as high as 70, before the opening. Now I don't know if they bought those shares, or cancelled those orders, but that is a representation of the hype around this company.
The stock was initially thought to be priced between 28 and 34(whisper number floated among potential buyers), then it was revised upward, despite the late addendum to the prospectus of the deminishing new members, the problems with the mobile app, and the fact that GM dropped advertising.
They refloated the number of between 32 and 38, being near the top end. WAY overvaluing a company which has yet to monatize it's business model(are ads enough to sustain the current business, without some additional income stream)?
Morgan was a little to optomistic in the pricing, when the upward trend in stock price began to falter, it started a series of sell orders, from those who bought it on the IPO, to lock in some profit on that first day. Monday followed with many sell orders coming from speculators who had bought it on friday in prices ranging from the $42.05 opening to what I saw as the high just above $43, and then back down to just above $38, where it closed.
Those sellers just wished to cut their losses, professional and amateur(johnq public) alike. IMO, and it is just that, an opinion, it should be fairly priced somewhere around $30. (no I am NOT advising anybody to buy it there)
People are still and will be jumpy about the stock market, for the next 5 to 10 years, based on the debacle of fall 08 until march 09.
Like all things, because you enjoy something, doesn't make it an ideal investment. Especially in the world of hightech. FB seems to be fun with Farmville, and Mafia wars..but is it a good investment for you? The answer seems not so much...
edit to add: no thinkinginCA, insanely high was in the 90's when ebay, a real high flyer or Amazon, had a PE ratio of 3200! Now that's insane, this was just mildly out of their minds. Why had the company been so touted? Because it, not unlike Microsoft, Oracle before it or later Redhat(which went from 30 to 90 back to 16), or amazon or ebay, represented a quantom leap in the way we view or use technology. Everyone wants to pile on a winner before it gets to winning.
The only company that was actually fairly valued was google because it had the earning to back the product, where the other were not as profitable when they went public. Google you will recall came at $72 a share and spiked to $300 before slowly moving higher to the 6-700 range! | |
|
Blalah
| | Joined: 3/25/2012
Msg: 14 | |
| |
| SEC, FINRA call for probe of Facebook IPO as stock slides
Posted: 5/24/2012 2:24:19 AM | Mark Zuckerberg missing as Facebook class actions grow
------------------------------------------------------------------------
http://www.couriermail.com.au/business/companies/mark-of-the-man-zuckerberg-missing-as-facebook-class-actions-grow/story-fndfrjq1-1226365835302
" ....In the five days since the company went public investor anger has been mounting over the deal which was fumbled by its major underwriters and complicated by technical problems at the Nasdaq stock exchange.
...Reports emerged today that Morgan Stanley and other major underwriters made around $US100 million by selling their extra allotment of shares to stabilise the share price on the first day of trading.
Yesterday, Zuckerberg completed the $US1.1 billion transaction of 30.2 million shares that he sold in the company's IPO, when he sold them for $37.58 a pop..."
-----------------------------------------------------------------------
i'm sorry, you were saying? | |
|
| |
| SEC, FINRA call for probe of Facebook IPO as stock slides
Posted: 5/24/2012 9:47:18 AM | "i'm sorry, you were saying?"
What? What about that means "pump and dump"? Do you understand what pump and dump means, in wall street jargon, or how the government views the phrase? You can post all you want, you're entitled to your opinion, but not use phrases or lies, to mislead people.
For the record, pump and dump, was a phrase used to describe a behavior used in the OTC market, usually in stocks that were listed in the pink sheets(these were very small companies or inactive stocks).
A unscroupulous broker, would buy a large position at a very cheap price, either from another investor, or by doing an IPO, for a company basically on the doorstep of bankruptcy. Then using a cadre of brokers, usually young and unexperienced ones they would have a script, touting the company with misleading and untrue facts, to potential cusomers.
Usually the story was "they were potential takeover targets of some huge company", or "they were about to launch a new or defining product in their industry"or some story of that nature. Using internet blogs(a recent development) or some fictitcious news letter for investors they would "tout or talk" the stock up.
Of course once the story was out there, it, because of the basic human emotion of GREED, would begin to have a life of it's own. The stock being bought by these sheeple would rise hundreds of %, in days or weeks. Typically from less than .25 cents, to several dollars. Once the unscroupulous BD, had sold out it's large position, made a huge profit, it would turn it's focus onto another company like this, and totally forget and not trade in the previous stock.
Then that first stock would crater down to less than .10 cents a share until the company filed for bankruptcy. Way back in the 70's & 80's, this was especially popular arizona, where literally hundreds of tiny gold stocks were listed in the pink sheets.
Now what part of this ACTUAL definition of "pump and dump" sounds like what happened at FB?
If you put down your tinfoil hat, and actually read the filings, you would have seen, the stake Zuckerberg sold was actually cited in the filing. As for the CIA/FBI...yeah...better get that tinfoil back on, the gamma rays are gonna getcha! | |
|
| SEC, FINRA call for probe of Facebook IPO as stock slides
Posted: 5/24/2012 4:04:43 PM | | LOLZ, greed caused people to buy the stock, expecting it must got up 300% lin a week or 2, like early internet stocks did. there are no guarantees in investing, suck it up you greed-heads and chalk it up to experience | |
|
Blalah
| | Joined: 3/25/2012
Msg: 19 | |
| SEC, FINRA call for probe of Facebook IPO as stock slides
Posted: 5/24/2012 9:11:31 PM | I don't understand any of this.
Maybe as it all plays out posters can explain it to us simpletons.
One (of a multitude) of the things that I do know and was taught at an early age and have
embraced and has helped me to understand people especially in business dealings is --
EVERYONE gets emotional about money
.... sometimes if it's only about 5 dollars. And even the times where it is completely unwarranted.
That's human understanding at it's most primary level.
| |
|
| SEC, FINRA call for probe of Facebook IPO as stock slides
Posted: 5/25/2012 2:00:24 AM | In order for a companies stock to rise in value, that company must be able to grow into more than it is.
The company must either get more market share than it has or it must have more to offer it's customers.
The problem with Facebook is that it can do neither of these things. Everything Facebook ever will be, it already is. It's a rather clumsily designed social network site which took advantage of the popularity of social networking just when the common public grew comfortable with computers and the internet.
There's no where for Facebook to go now. Everyone who wants to be on Facebook, already is.
Facebook has nothing much more to offer it's members, unlike Google which is constantly thinking up new things to offer and new fields to delve into.
The guys at Facebook think they are going to replace Google but they can't as long as people use Google to find Facebook. They're stuck having to think up ways to get more revenue out of a static customer base.
They really should have offered the IPO at least a year ago. | |
|
| SEC, FINRA call for probe of Facebook IPO as stock slides
Posted: 5/25/2012 9:11:31 AM | "They really should have offered the IPO at least a year ago."
This is a statement I can agree with! No different than the problems Morgan Stanley is having with justifying it's actions, this is where FB is at fault.
As I mentioned earlier, there is a fine line between pricing too high and too low. Well similarly there is taking a company public too soon or too late. The pyschology of FB as a company has several issues that were never addressed in a timely manner.
The first being Zuckerberg's urge to have control, so as not to give away the power of giving the company it's direction versus profit potential. In his eyes, with growing membership, limited but growing ad sales, he thought keeping content and design control was more important than involving new owners in the business. Of course most of this can be attributed to his youth, and unwillingness to listen to advisers, who had a different take.
Next of course was that while it was growing, it was worth more than it would be fully grown. Once you have reached saturation(they now have 1 in 7 worldwide as members)your product's growth might become static.
Finally, instead of the last round of financing coming from venture capital, it should have come from an IPO of shares in the company. What resulted was a two fold problem. The first was FB the company really got very little working capital out of the IPO. The second was that most of the shares sold, were those owned by insiders and venture capitalists. What will happen as a result of that is still unclear. The latter group was pulling capital off the table, to reduce their risk, rather than give the company more capital to expand.
This will be interesting to watch as the story develops, not so much about the IPO, but the very existance of FB itself and it's potential ability to grow. | |
|
| SEC, FINRA call for probe of Facebook IPO as stock slides
Posted: 5/25/2012 6:51:27 PM | | Lets not forget that this was the Facebook IPO. So there was going to be a lot of interest in it. They were able to sell out the initial offering at $38 a share and certainly could have sold out at an even higher valuation. They thought the whole mystique around Facebook would continue. They were wrong. It's happened before on the market with far more disastrous consequences. | |
|
| SEC, FINRA call for probe of Facebook IPO as stock slides
Posted: 5/25/2012 7:09:54 PM | | ^^^As I mentioned earlier...you just knew it was going to be pigfest as soon as Goldman jumped in last year. Just another way for the principals to suck a few billion out of the system at the expense of.....well the market losers. | |
|
| SEC, FINRA call for probe of Facebook IPO as stock slides
Posted: 5/25/2012 9:38:31 PM | ^^^^^ Yep- overhyped IPO- initial price is guess work and the whole thing is overhyped. Prime target for a quick in and out.
We had a similar stock here in Canadian a few years ago- Tim Hortons- our national coffee shop- for the Americans think of a Starbucks IPO- lots of glitz- started off big- fell back after the sell off and quick profit taking. But i just checked- done very nicely since 2010.
Investing like that is a risk- you have to have some money sense. The oracle of Ohama, Mr Buffett said buy stuff you understand. Its a little lost on the public what that really means. Its not just that you use it or consume it and think its great- the companies management has to show how they can make money with it and demonstrate that fact for a while first. | |
|
| SEC, FINRA call for probe of Facebook IPO as stock slides
Posted: 5/26/2012 9:25:02 AM |
"They really should have offered the IPO at least a year ago."
'should have" ? really it is NOT the job of company execs to help investors get a good price and make money quickly, their job is to get the best (highest) price possible per share for the company, to fill its cash coffers (and also help themselves since as insiders they have large stock holdings).
companies tend to issue stock at a time they believe is most opportune for the COMPANY- at a high point in the cycle. not at a low point to 'give money away' or 'leave a lot of money on the table' for investors
they don't intend to low-ball so greedy investors hoping for another get-rich quick internet thing can make 300% in a few weeks with a huge 'pop' in the price..buyers of stock are allegedly investors in it for the long term, not speculators hoping to make quick buck with in-and out trades in a few days or even an hour or 2..though many have gotten to that point these days
similar to what pretty well everyone does..do people like to sell their house during a real estate slump? no, they prefer to sell at high price points, during a boom | |
|
|
|
Home
login 
