HardOCP News
[H] News
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I know everyone is sick of hearing about Facebook's IPO today but this is definitely quote of the day:
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Facebook IPO 'Like Kissing Your Sister'
- Thread starter HardOCP News
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sfsuphysics
[H]F Junkie
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People bought, people who owned finally were happy they could make some real money out of it and sold. At the end of the day no one lost or gained much money.
I'm actually quite happy that speculation didn't artificially make this "product" worth more than it should have been.
Although the inner demon in me was hoping that a lot of the big owners would have cashed out and caused the price to plummet, then we would have a different talk about Mr Singapore.
i wonder how many were blindly assuming they'd be able to get a effortless and huge jump on their investment in the early trading of Facebook. I wont be surprised if this flat trading day has shaken the confidence of these investors and we see a nervous selloff as they no longer want to gamble for a big payoff against being the suckers left holding the bag
Ashbringer
Supreme [H]ardness
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Investments like in Google / Apple's startup days, when they were hardly anything, up until now, will grant enormous profit.
Facebook's case..... they are already pretty well developed. Had they done this IPO back in 06, then you could expect a large profit today.
Facebook's case..... they are already pretty well developed. Had they done this IPO back in 06, then you could expect a large profit today.
What do you call the people who bought in near the 45 high and ended the day at 38 ?!?!?!
The "public" trading started around 38. So pretty much ALL of John Q. Public LOST money today.
There was almost zero chance of it going below $38.00. The syndicate has to step in and support the stock at the IPO price if it gets down that low. I believe Morgan Stanley was the stabilization agent in this case, so they probably got stuck with a bunch of shares at $38.
Actually, the first tick in the secondary market was $42.05. The initial $38 price was for the primary market only which doesn't involve the "public." It did get down to $38.00 intraday, so some investors may have ended the day up 0.6%. Apparently NASDAQ had issues so who knows how many orders actually got filled at $38.00.
Zepher
[H]ipster Replacement
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were all shareholders allowed to sell today? I am not very knowledgeable in this stock stuff
but I read something along the lines that "inside shareholders would be able to sell their stocks in a few months". what does that mean?
It's known as a "lock-up" period. Insiders have to wait to sell their shares. The investment banks do it so the insiders don't all sell at the IPO and flood the market.
sfsuphysics
[H]F Junkie
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Well if those who bought at 45 sold at 38 in one damn day, then I'd call those people retards.
Now if you decide to sell tomorrow for 38 you're also a retard, if you're scared about an 18% dip in the price after a single day you're obviously just in trying to get a quick buck turn around and in that case your gamble lost.
But stocks are funny that way, you don't actually lose money until you decide to cash out, it's literally like gambling. If you can afford $38,000 worth of stocks, you probably can afford a few thousand loss, if you bought a 10 shares then you shouldn't get your panties in a twist over 70 dollars of potential loss.
Isn't this a form of price fixing or market manipulation?
In this case that's how it works out. The greenshoe option was originally made to help over-subscribed IPOs, but it can be used to stabilize pricing as well by allowing them to sell more shares (they sell them short) and then buy them back at the IPO price. Keep in mind that while the stock didn't move up in price much, volume was absolutely insane. I think it did about 570 million shares of volume.
Arcygenical
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What's wrong with kissing your sister?
sfsuphysics
[H]F Junkie
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So what you're saying is expect Morgan Stanley to pull a JP Morgan and announce $2 billion in losses sometime soon?
Isn't the whole short selling what got everyone in trouble with the Crash of 29? But I guess when they "have assets" (or at least the perception of them) you can get away with doing that on large scales.
Not exactly. There's very little risk in this case unlike normal uncovered short selling. In this case they can sell up to 15% of the IPO short and then purchase that 15% back at the IPO price ($38 in this case). It's the buying back that supports the stock at $38 and since they initially shorted it at $38 or more, there's no loss for them.
Short selling at other times is definitely risky though. Large margin calls have put plenty of hedge funds out of business, even when the trade they did was 100% correct and eventually worked out.