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« International Economic Forecast 2012-2013 | Main | Wood Products Forecast: Business Strategy in the Soft Rebound »

May 24, 2012

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Comments

Brett

Your generation makes me sick. Some people got rich, so this was not a bad thing? What a sham. Tell me, who do you think it was that pushed that price up to 46.00? Facebook will go the same way as yahoo, it was never a good investment. And here you are patting facebook on the back for pretty much stealing peoples' money with the help of Morgan Stanley. *middle finger*

alternative investments

Very good points. Have also been wondering why Facebook IPO was considered a flop. Just because it did not get some artificial jump on the first day does not mean that the IPO was a flop. The bigger issue is simply the valuation of FB - at a 50 billion valuation its got some nice upside, but 104 billion was way out of line.

High Frequency Trading Software

The Float was way too big for the IPO. A Good IPO has a limited number of shares. Its almost like Facebook did the IPO to raise money rather than increase the value of the company. If it goes above $50 it might be a good buy, but I wouldn't touch it until then.

Bill D.

Leaving aside two specific issues (trading failure by NASDAQ, and allegations of failing to disclose potentially lower projections by the underwriter) -

Kudos and I agree with most of Bill's comments, but not all. I agree it's a crock that 'successful' IPO's are defined by stock prices that jump on the first day. That's a pattern that enriches investment banks (their trading books) and their favored clients, at the expense of existing shareholders and new shareholders that buy high.

However, the Facebook pattern (IPO high, close low) is a failure as well. IPO's that work through an auction process or other non-proctored (shall we say) methods should result in a fairer price and reduce IB fees and profits. A success pattern would be a stock that opens and closes at roughly the same value, whose price then rises/falls based on fundamentals.

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