More.... “In other words, during the marketing of the Facebook IPO, investors who did not hear about these underwriter estimate cuts were placed at a meaningful and unfair information disadvantage. They did not know what a lot of other investors knew, and they suffered for it.
Selective dissemination of this sort could be a direct violation of securities laws. Irrespective of its legality, it is also grossly unfair. The SEC should investigate this immediately.
We first heard rumblings about this last week, and we were so startled that we assumed the reports were wrong. Then, over the weekend, when Reuters reported the basic story again, we said that if it was true, Facebook IPO buyers deserved to be “mad as hell” about it. And now Reuters has the details, and they sound as bad as we had feared.
There are a couple of possibilities for what happened.
The first one is bad news for Morgan Stanley and the other lead underwriters on the deal.
The second is also bad news for Facebook.
According to Reuters, the underwriter analysts cut their estimates after Facebook issued an amended IPO prospectus in which the company mentioned, vaguely, that recent trends in which users were growing faster than revenue had continued into the second quarter.”
I don’t get the Facebook concept, and I sure didn’t get the hype behind the offering.
I’m just a boring utility investor.
Just more fodder for the Socialist argument that “Capitalism is a rigged casino game”.
Sooner or later, by playing things too cute, guys like this are going to elect the American Hitler or Stalin.
More and more it seems that the purpose of banks, stocks, and investments is to steal from you and be legal in doing so.
The purpose was to transfer $$$$$$$$$$$$$$$$$$$$$$$$$
from Main St. and taxpayers to the bankers and DNC.
Yet another reason why I have never participated in any IPO that was NOT underwritten by Goldman Sachs. Love them or hate them, but they know how to do it right, as they did (big time) with China’s Baidu (BIDU) in 2008. Morgan is just pathetic.
"But, just as important, news of the estimate cut was passed on only to a handful of big investor clients, not everyone else who was considering an investment in Facebook."
The wonders never cease.
I look forward to the day when anti-virus programs treat Facebook like the virus it is.
Just like the tech bubble. Think about what Facebook does and how it generates revenue. That should give you an idea of its ‘growth’ potential.
Like most tech companies, the value of Facebook is driven by people’s imagination. Very little behind it. Most people already believe it is a fad.
This is the kind of thing in combination with guilt by association that makes republicans a hard sell. I am very pro-free market, but until some of these bastards are hung in the streets the sheeple will continue to push for socialism (which incidently only empowers scumbags even more). This is a serious problem that the republican party needs to come up with a solution for. Other than Ron Paul the rest of them just sound like [insert bank name] board members. And Ron Paul would get us all killed, so there has to be another option!