Facebook IPO

[Captain Crawfish]

Jim Cramer tells me everything I need to know.

yep if he talks about a stock its guaranteed to bleed like a stuck pig the next day!

[talisman]

It isn't illegal per se. Clients can opt to pay more to receive differing levels of service. The service level cannot, however, disadvantage lower-tiered clients materially. So it depends on how the details went down, but I certainly don't ever want my name popping up in a news article that mentions selective dissemination. That's how Goldman went down a while back with their "trading huddles". Here's an example:

Almost every time we are publishing research (stock opinions, upgrades, downgrades, estimates, forecasts, price targets) I am submitting late at night after the market close, for rollout the next morning b/f opening bell. I also leave a "blast voicemail" regarding the note we are going out with and a summary of our thoughts, ideas, etc and tell them to call us for more color. This blast voice message goes out to our "Platinum tiered" client list.

At the same time, I'm submitting our research for publishing review by compliance. If it's late (it usually is) I might submit at like midnight and just go to bed because I have to get up at 4 AM to blast email the note to our entire client list - wide dissemination - well before market open.

In this example, one tier of clients has gotten a little more color, a different level of treatment, than another level. However, every client received notice of our note, it's mass distributed, well before market open. Every client of our bank has had an equal change to act on information we published.

Where we run into trouble is this - I submit the note late, the voice mail blast goes out, but while I'm soaking up my 3 hours of sleep compliance rejects our note. Now, I have to scramble whenever I find out, to correct anything they had an issue with, resubmit, let them review/approve and then mass blast an email well before market open so that the "voice mail" client list isn't advantaged.

Sounds like a huge pain in the ass. LOL

[FreightTrain]

It isn't illegal per se. Clients can opt to pay more to receive differing levels of service. The service level cannot, however, disadvantage lower-tiered clients materially. So it depends on how the details went down, but I certainly don't ever want my name popping up in a news article that mentions selective dissemination. That's how Goldman went down a while back with their "trading huddles". Here's an example:

Almost every time we are publishing research (stock opinions, upgrades, downgrades, estimates, forecasts, price targets) I am submitting late at night after the market close, for rollout the next morning b/f opening bell. I also leave a "blast voicemail" regarding the note we are going out with and a summary of our thoughts, ideas, etc and tell them to call us for more color. This blast voice message goes out to our "Platinum tiered" client list.

At the same time, I'm submitting our research for publishing review by compliance. If it's late (it usually is) I might submit at like midnight and just go to bed because I have to get up at 4 AM to blast email the note to our entire client list - wide dissemination - well before market open.

In this example, one tier of clients has gotten a little more color, a different level of treatment, than another level. However, every client received notice of our note, it's mass distributed, well before market open. Every client of our bank has had an equal change to act on information we published.

Where we run into trouble is this - I submit the note late, the voice mail blast goes out, but while I'm soaking up my 3 hours of sleep compliance rejects our note. Now, I have to scramble whenever I find out, to correct anything they had an issue with, resubmit, let them review/approve and then mass blast an email well before market open so that the "voice mail" client list isn't advantaged.

Wouldn't it just be easier to tell them to buy low and sell high.

[slow99]

Wouldn't it just be easier to tell them to buy low and sell high.

Well, of course ... but then I-bankers wouldn't make choo$$$$$$ chooo$$$$ money.

[War Machine]

Wouldn't it just be easier to tell them to buy low and sell high.

the god damned over paid bus driver says buy low, sell high!!!

[Trip McNeely]

Apparently some shareholders are planning a lawsuit. I just skimmed an article in the Pittsburgh news.

[Sean88gt]

Apparently some shareholders are planning a lawsuit. I just skimmed an article in the Pittsburgh news.

There is all kinds of fun stuff circulating around this one, such as MS had planned to downgrade the company - after the ipo. I still think that Zuckerberg cashed out (30 MM shares) because he knew that shit was coming and also didn't want to panic everyone by dumping everything.

[Gear_Jammer]

Apparently some shareholders are planning a lawsuit. I just skimmed an article in the Pittsburgh news.

http://news.blogs.cnn.com/2012/05/23...-little-worse/

11:55 AM ET
Oh, Zuck: Facebook's bumpy start just got a little worse


To say its been a rough ride for Facebook's IPO would be an understatement.

And as the social media giant edges toward the close of its first week of trading, questions are swirling about the company's valuation, its profitability and now allegations that full details of the stock's likely value were shared with only a select group of people.

Did some people get a heads-up Facebook's IPO wasn't what it seemed?

Regulators are now looking into the possibility that Facebook's Wall Street investment banks may have tipped off some clients that Facebook wasn't necessarily a great buy or worth the hype it was receiving, according to reports Wednesday from Reuters and several other news organizations.

“Facebook changed the numbers – they didn’t forecast their business right and they changed their numbers and told analysts,” a person at one of Facebook’s banks told Reuters.

The big question is: Did certain privileged customers receive information about the Facebook offering that you as an individual investor might not have?

Rick Ketchum, head of the Financial Industry Regulatory Authority, an independent regulatory body, acknowledged in an article from Reuters that a Morgan Stanley analyst reduced his revenue projections for Facebook shortly before the offering and shared the information with institutional investors.



And now Facebook shareholders have filed a lawsuit against the social network, CEO Mark Zuckerberg and a number of banks, alleging that crucial information was concealed ahead of Facebook's IPO. The lawsuit, filed in the U.S. District Court in Manhattan on Wednesday morning, charges the defendants with failing to disclose in the critical days leading up to Friday's initial public offering "a severe and pronounced reduction."

Facebook defended themselves on Wednesday saying they "believe the lawsuit is without merit and will defend ourselves vigorously."

The report, and now the lawsuit, raises questions about whether Morgan Stanley, one of the underwriter companies that handled Facebook's IPO, or other banks knowingly offered certain investors privileged information that should have been made public. Other underwriters targeted by the lawsuit include Barclays Capital, Goldman Sachs, JPMorgan Chase and Merrill Lynch, a unit of Bank of America.

It is possible that Morgan Stanley may have signed off on a price that was too high or agreed to sell too many shares in the deal, CNNMoney.com reports. Then, Morgan Stanley analysts are alleged to have told certain people they had a negative assessment of the social network's offering.

"If true, the allegations are a matter of regulatory concern to FINRA and the [Securities and Exchange Commission]," Ketchum said in a statement via a spokeswoman.

The New York Times reported Morgan Stanley did more than just quietly share a negative outlook; they actually "held conference calls to update their banks' analysts on business."

"Analysts at Morgan Stanley and other firms soon started advising clients to dial back their expectations," the article says. "One prospective buyer was told that second-quarter revenue could be 5 percent lower than the bank’s earlier estimates."

Sallie Krawcheck, Bank of America's former head of wealth management, took to Twitter to share her outrage about the allegations.

[Broncojohnny]

I like how everyone wants to sue because they bought some junk at a high price. If the stock had gone up, for whatever reason, would they still be trying to cry foul? Funny how that works.

[talisman]

It really doesn't surprise me. People already love to hate that site, so them fumbling this is a perfect time to attack(not that it isn't justified, I don't know enough about all this to comment on that aspect).

What was the tagline from The Social Network? "You don't make 500 million friends without making a few enemies?"

[Captain Crawfish]

WhO bought wprt at 25? congrats if u did

[Sean88gt]

I like how everyone wants to sue because they bought some junk at a high price. If the stock had gone up, for whatever reason, would they still be trying to cry foul? Funny how that works.

But the reaction seems a bit premature. Is the sense that the company will falter and die or is there a long term shelf life?

[Broncojohnny]

But the reaction seems a bit premature. Is the sense that the company will falter and die or is there a long term shelf life?

It depends on who you ask. Most people who do any sort of analysis are going to conclude it is overpriced at $38. Of course, we are talking about the stock market here, people buy based on emotion rather than any solid idea about value vs. share price. It fascinates me.

If I tell you that you can buy a Whataburger franchise for $100K the first thing you will ask me is how much you are going to net every year from that operation. Then you'll figure out what your return is. People throw all that shit out the window when they buy a share of stock. If the Whataburger was for sale, I wouldn't pay more for it just because my neighbor said he was interested, I'd let the math tell me if it was a good deal. Yet it happens all the time in the stock market.

[mstng86]

I take it this is not going well.

[Nash B.]

I take it this is not going well.

Depends on if you bought high or sold high.