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Why did Facebook go public? - 5/22/2012 5:27:53 PM

kalikshama

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They couldn't figure out the privacy settings either

But seriously:

As Facebook’s Stock Struggles, Fingers Start Pointing

Wall Street is playing the Facebook blame game.

As shares of the social network tumbled in their second day of trading, bankers, investors and analysts wondered what had gone wrong with the initial public offering of Facebook, the most highly anticipated technology debut in years.

Some fingers are pointing at Morgan Stanley, the lead banker on the I.P.O., while others criticize Nasdaq and even Facebook itself. In the aftermath, critics contend that Facebook’s offering price was too high and too many shares were sold to the public, hurting the stock’s performance out of the gate.

Facebook’s troubles could damp enthusiasm for a spate of companies set to go public in the coming months. It could also spur changes in the I.P.O. process. In particular, big institutional investors like Fidelity and Vanguard may demand greater say on pricing, at the expense of companies and their bankers.

“It’s a huge disappointment,” David J. Abella, a portfolio manager at Rochdale Investment Management who tried to get shares in the offering but did not get an allocation. “Investors were expecting easy money on this one.”

Facebook was promoted as the next Google, a technology star primed to soar.

But the stock stumbled in its debut on Friday. A systems error at the Nasdaq, where shares of Facebook are listed, hampered trading in the first few hours. With the company hovering around its offering price of $38 a share, Morgan Stanley had to step in to help stabilize the price. Facebook shares ended the day almost at the same place they started.

While bankers may have hoped that Facebook would bounce back on Monday, unfettered by technical problems, such optimism faded as the stock sank. It tumbled 11 percent, closing at $34.03.

Read more: http://dealbook.nytimes.com/2012/05/21/as-facebooks-stock-struggles-fingers-start-pointing/

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RE: Why did Facebook go public? - 5/22/2012 5:30:58 PM

MileHighM

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Simple their business model is not solely to make money.....Something that doesn't fit well with WallStreet and the people who invest in stocks.. no ROI, means no investment..

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RE: Why did Facebook go public? - 5/22/2012 5:40:35 PM

mnottertail

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Trouble is, when you look at facebook, from an investing standpoint, just how the fuck are they going to make money, how they making money, whats the scam? Fuckin Zynga?

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RE: Why did Facebook go public? - 5/22/2012 5:43:44 PM

MileHighM

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Yeah especially after GM said advertising on FB was completely worthless.

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RE: Why did Facebook go public? - 5/22/2012 6:17:06 PM

mnottertail

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That was rather an unhelpful aside in the scheme of things, wasn't it?

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RE: Why did Facebook go public? - 5/22/2012 6:22:54 PM

Owner59

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If you can draw a certain number of people to a site often enough,there will be someone willing to pay you to stick an ad or pop-up there.

Maybe not GM but someone.

I think maybe they bit off a bit more than they could chew.

The investors thought it would be a good pay day.......and it still may.

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RE: Why did Facebook go public? - 5/22/2012 6:52:29 PM

tj444

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FB went public cuz its a lot harder to sell parts of your business or all of it privately and likely you wont get as much for it.. they went public to be able to get their money out if they decided to do that, the "exit strategy".. that is usually part of the business plan.. its hard to raise capital when you have a business plan but no exit strategy.. and of course the brokerage co is in there to make their bucks too..

In many IPOs the stock shoots up right after going public but then drops right back down to around the offering price.. not all do that but enough that its quite common so the insider people that the brokerage co sells the first stock to like to hold it very short term and sell as close to that spike as they can, which might mean they hold it for a few days or a few weeks and make some good coin on it.. Lets face it tho,.. the economy still aint doing great, there is an election in 6 months, and unknown outcome of that.. not the best time to float an IPO with this uncertainty..

but hey, Zuckerberg wanted to get hitched so the time was right for him (so if there is a divorce the stock and his worth at the time they got married isnt up for debate by divorce lawyers).. Come on people!!! arent ya'll happy for Mark???

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RE: Why did Facebook go public? - 5/22/2012 7:02:58 PM

DarkSteven

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Yay!

For far too long the initial IPO shares have been withheld from the public. The shares would go on sale, and the brokers and their buddies would get the initial appreciation. The great unwashed had to take chances and not have a sure thing. About time that the automatic enriching of the 1% stopped.

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RE: Why did Facebook go public? - 5/22/2012 7:48:56 PM

SternSkipper

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quote:

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They couldn't figure out the privacy settings either

We gotta get you a dude with a snare drum.

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RE: Why did Facebook go public? - 5/22/2012 7:59:33 PM

servantforuse

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Steven, Brokers always get first dibs on an IPO. Sometimes it works out for them, sometimes not so much.

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RE: Why did Facebook go public? - 5/22/2012 8:18:53 PM

SternSkipper

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quote:

Steven, Brokers always get first dibs on an IPO. Sometimes it works out for them, sometimes not so much.

Wow ... that's deep and GROTESQUELY old news ...
It's as simple as this. Since the profit potential with facebook being sketchy the HYPE didn't work this time. I sensed this would be a led balloon when people tweeted less about the IPO than people tweet about Ron Paul after march 1st starting about 3 full weeks ago.

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RE: Why did Facebook go public? - 5/23/2012 8:22:50 AM

DesideriScuri

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Morgan Stanley is also being investigated for potentially fraudulent practices. One of the rating agencies downgraded his earnings potential rating (it was downgraded from the low $5B's to the high $4B's), and the SEC is making sure that Morgan Stanley didn't selectively inform investors.

If it's true, it's yet another fail by the big banks where their actions have directly bitten them in the ass. Bravo!

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RE: Why did Facebook go public? - 5/23/2012 8:25:50 AM

Owner59

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How about we make them personally pay...literally.........instead of us personally paying...literally.

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RE: Why did Facebook go public? - 5/23/2012 8:31:39 AM

Iamsemisweet

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One o f the most anticipated IPOs ever falls flat on its face. Imagine that. Therealtest will be what the stock is like in a year.

Unfortunately, FB's business model is not dependent on selling ads. What they are really in the business of selling is their members' privacy.

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RE: Why did Facebook go public? - 5/23/2012 8:36:15 AM

Owner59

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This may well be what gets folks interested in another social site......that`s all it takes.......people`s interest(or dis-interest).

One that`ll be more true to it`s members and not screw around.

FB could be the next myspace.

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"As for our common defense, we reject as false the choice between our safety and our ideals"

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RE: Why did Facebook go public? - 5/23/2012 8:43:27 AM

Yachtie

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I bet there's more conversation flowing through Twitter about this IPO than FB.

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RE: Why did Facebook go public? - 5/23/2012 8:53:02 AM

fucktoyprincess

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So that the private investors could cash out before the thing tanks....

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RE: Why did Facebook go public? - 5/23/2012 8:56:44 AM

Yachtie

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quote:

ORIGINAL: Owner59

FB could be the next myspace.

Ya think?

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Post #: 18

RE: Why did Facebook go public? - 5/23/2012 9:15:36 AM

Owner59

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That would mean Rupert`ll buy for a zillion-million bucks........

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"As for our common defense, we reject as false the choice between our safety and our ideals"

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RE: Why did Facebook go public? - 5/23/2012 11:40:57 AM

Musicmystery

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quote:

Why did Facebook go public?

Because (1) even the fluctuating stock price richly rewards FB's early investors and employees, all of whom have just made a killing, and (2) this offering brings a ton of new cash into FB.

Now...they need to figure out how to generate more revenue. But they just got a big chunk of financing, and have the means to invest in new approaches.

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