Posted on 05/23/2012 12:30:10 PM PDT by C19fan
Short sellers desperate to bet against Facebook shortly after its debut on public markets are now getting their chance.
Shares of the much-anticipated IPO have fallen sharply since they opened at $42.05 on Friday amid an initial flurry of trading problems at the Nasdaq and after news that top underwriters cut their revenue estimates just days before the offering.
Yet, short sellers are still eager to bet against the stock given its lofty valuation.
(Excerpt) Read more at reuters.com ...
Facebook == Tulip bulbs?
Never having participated on either, can anyone tell me why anybody would reasonably expect facebook to fare any better than myspace?
May be time to buy...
The truly GREAT thing about this entire debacle is that an entire new generation of potential stock investors now sees (or, should see) that Wall St is completely set up to provide insider advantage and has utterly zero interest in the small retail investor. Other than ripping off their money, if they can.
I doubt it.
The only money they make is by selling advertisement.
GM just pulled out altogether from advertising on Facebook, because they said it didn't work.
If GM can't make it work, who can?
Outside of the HHS buying ads for Obamacare...Oh, I wish I hadn't thought of that...
As of yesterday PUT options were not available on Facebook.
In most cases, options do not become available on IPOs for either 60 or 90 days after issuance of shares. That was last I checked, I could be wrong on that. Even if puts *were* available, the implied volatility that you’d have to pay for would practically guarantee you could never make money on them, unless the stock dropped maybe 7+ points, from the price point you bought them.
Secondly, you understand, that at the moment a stock goes public, that there is no practical way that the stock can be shorted (for a retail investor) because no borrow can occur. Oh, sure, if you’re MS or JPM or a huge brokerage, you know how many of your customers have IPO allocations and can generally assume that some will sell on the opening pop, or shortly thereafter. Those shares must be borrowed to legitimately execute a short sale, but those rules only apply to you and me. A retail investor, could almost certainly not short FB on day one or day two. Because you could not get a borrow at the time you placed the order. Theoretically, you could not short the stock until the third day of trading, until the sales that occurred on day one cleared T+3.
I think FB sees single digits within say 18 months, but it’s nothing I’m personally interested in, long or short. I enjoy the clownfest, though.
I waited 10 minutes for the final ticker to change. Short sellers should bet on this number:
DOW -6.66
yitbos
The lawsuit that was just filed should be interesting. Big investors getting a private briefing by the Wall St. firms before the IPO while the small fish are caught up in the media frenzy. Safe to say that many of the big investors were waiting for the suckers to get cleaned out before they move in to scoop up the shares at bargain basement prices.
FB is a 7-9 dollar stock. There is absolutly no way it should have come out at $38.
Facebook’s value is number of users x advertising revenue per person. Facebook’s constant ripping off of user privacy to increase advertising revenue is causing a drop in users, especially those with money (Third world and teenagers not included in this discussion).
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