More Facebook IPO Antics

More Facebook IPO Antics

May 23rd, 2012

“There is often VERY strong voodoo at work…”

Facebook IPO

I don’t want to bore people with too many posts about this, but the stories are getting pretty interesting for being only a few days out from the IPO.

Here’s The Inside Story Of What Happened On The Facebook IPO:

The analysts cut their estimates because a Facebook executive who knew the business was weak told them to.

Put differently, the company basically pre-announced that its second quarter would fall short of analysts’ estimates. But it only told the underwriter analysts about this.

The information about the estimate cut was then verbally conveyed to sophisticated institutional investors who were considering buying Facebook stock, but not to smaller investors.

The estimate cut appears to have influenced the investment decisions of at least some institutional investors, dampening their appetite for Facebook stock, and crucially, affecting the price at which they were willing to buy Facebook stock.

As I described earlier, at best, this “selective disclosure” of the estimate cut is grossly unfair to investors who bought Facebook stock on the IPO (or at any time since) and didn’t know about it.

At worst, it’s a violation of securities laws.

This one is a keeper. Don’t try to drink your coffee while reading this. You risk keyboard and monitor damage from uncontrollable laughter.

Hedge Funder Who Bet $100 Million On The Facebook IPO Just Called And Boy Was He Furious:

So Friday closes, everybody is saying what the fuck, I don’t know if I sold or not.

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