

Facebook Not Feeling Friendly With Nasdaq - nohup
http://dealbook.nytimes.com/2012/07/01/facebook-not-feeling-friendly-with-nasdaq/

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fragsworth
One thing I don't understand is why the media portrays Facebook as "botching"
its IPO. If anything, didn't the company make out with a better deal than
their market value? How is this bad for Facebook? It's only bad for
_investors_ , if they invested in Facebook before its market value dropped,
right?

Also, I'm sure the investors and underwriters knew that there's a significant
amount of uncertainty and risk when investing in new technology companies,
especially with industries that have never been around before.

I feel like this is just the media circus trying to blow things out of
proportion.

~~~
pkteison
It is referred to as botched because it actually was - NASDAQ actually broke
during the initial day of trading. Initial start of trading was delayed, then
trades went through didn't get confirmed for -hours-, which is something of a
disaster. This isn't some figurative use of the term, nasdaq actually failed
in the objective sense.

NASDAQ's chief basically saying his company sucked:
[http://www.bloomberg.com/news/2012-05-20/nasdaq-ceo-says-
poo...](http://www.bloomberg.com/news/2012-05-20/nasdaq-ceo-says-poor-design-
in-ipo-software-delayed-facebook.html)

~~~
powertower
You're forgetting the part where NASDAQ told every major player to sell the
Facebook shares they had, if they wanted to get in on some of that 40 million
in compensations (you had to fill in the sold-at price on the form, or forget
about it).

~~~
cynicalkane
Can you clarify or provide a source?

It's not clear what you're saying, or why it's bad. If you're saying that
traders need to have sold shares to get compensation, well, should NASDAQ just
compensate everyone who says they didn't sell shares but were planning to,
cross their heart and hope to die?

~~~
veyron
If you are arguing that you were damaged specifically because of technical
glitches associated with the IPO, you are expected to sell the shares. Any
price action after that is due to factors outside of NASDAQ's direct control,
and there's a sense in which you are taking risk by continuing to hold.

(Otherwise, everyone would sue whenever a stock price moved -- shareholders
complaining when prices fall and short parties complaining when prices rise)

------
antidoh
"For more than two decades, Silicon Valley has played a vital role in Nasdaq’s
evolution,” said Joseph G. Christinat, a Nasdaq spokesman. “Nasdaq will always
strive to be part of the Valley’s start-up ecosystem."

Maybe the Valley needs to start its own exchange.

~~~
wh-uws
This is quite an interesting thought.

How would this work? What would need to be done.

Pros, cons?

~~~
veyron
The roadmap is fairly clear. You would first have to set up an ATS (which
really doesnt require too much, but it does involve regulatory and paperwork
hurdles)

The main advantage is that you can disrupt the exchange business. The
disadvantages are many, including having to deal with SEC etc.

------
jinushaun
Facebook needs to stop blaming everyone else for their failed IPO. NASDAQ
didn't cause people to dump the stock days after the IPO. No, those were
caused by stories of FB's overvaluation, GM pulling out and their inability to
monetize mobile.

~~~
SoftwareMaven
NASDAQ telling the market "you have until noon Monday to prove your losses"
most definitely _did_ cause people to dump stock in the first two days of
trading. Confusion over whether trades were happening because NASDAQ wasn't
confirming orders probably caused investors to be skittish, which could easily
have had cascading negative effects.

It's hard to say if FB's stock was overpriced. The GM thing couldn't have
helped. But to say NASDAQ had nothing to do with it is silly.

I look at FB's IPO and think of this[1]. Little (and not so little)
permutations causing shockwaves through the system.

1\.
[http://www.youtube.com/watch?v=Suugn-p5C1M&sns=em](http://www.youtube.com/watch?v=Suugn-p5C1M&sns=em)

------
alttab
Facebook feels manhandled? Now it knows how it's users feel when it: changes
privacy settings, makes profiles public, sells information to advertisers,
tracks browsing habits outside of Facebook, and comonderes e-mail addresses.
Fuck you Facebook. Your little butt-hurt whining means nothing to most people
as you made billions off the deal anyway.

Seriously, Facebook screwed many people over in its short life. I can't help
but get a little satisfaction out of their IPO issues and lower stock price.

Maybe if they at least pretended they gave a shit about anyone other than
themselves they'd get more empathy from guys like me.

Boo hoo.

~~~
grannyg00se
This seems like a lot of hostility and resentment for a voluntary, user-
generated-content website.

~~~
alttab
You say that like there are many other choices. I joined back when only
colleges could have access, and it was a safe place to talk to your friends
and post your party pictures from last weekend.

It has "grown", but also has muscled out any competitors through various
means. Facebook takes full advantage of their network effect and to me that
feels more like a bait-and-switch with a gun to my head.

~~~
grannyg00se
Are you saying that you feel you have no choice in life but to maintain an
active Facebook account?

That is fascinating. And concerning.

I do say there are many other choices, but if you feel there are none, our
situations must be vastly different. I have no idea how someone could feel
that they _need_ Facebook.

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droithomme
This is just a giant distraction from the fact that Facebook illegally
disclosed select data about results to insider investors the week before the
offering.

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richardw
FB needs to focus on other things, rather than keeping the "failure"
association in the minds of investors any longer than it needs to be. Changing
to NYSE or whatever would be a huge waste of time. Markets are forward-
looking. The primary message from investors is "we don't think you can make us
money", not "we think your first-day market action remains terribly important,
and we'll buy every stock you can sell us if you change exchanges".

So fix the real problem. If you fulfil all the potential we keep hearing
about, investors will find your listing.

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veyron
Everyone is blaming NASDAQ for issues that are not inherently NASDAQ's fault.
The IPO "flopped" not because of the exchange but because demand wasn't there.
Switching to NYSE won't magically change the price (and I'm pretty sure the
price would have fell on the opening day if they listed on NYSE).

~~~
jessedhillon
Don't you think you should provide some evidence for your claim?

~~~
veyron
Which part?

"Everyone is blaming NASDAQ for issues that are not inherently NASDAQ's
fault."

The IPO was delayed during the day because of Morgan Stanley (asking customers
not to dump at the open). NASDAQ is not buying shares and hence is not
required or expected to bring demand to the table.

The IPO "flopped" not because of the exchange but because demand wasn't there.

That demand wasn't there was established in many post-mortem analyses. Do a
quick google search.

"Switching to NYSE won't magically change the price (and I'm pretty sure the
price would have fell on the opening day if they listed on NYSE)."

For the venue to have changed the price action, the initial demand would have
had to been restrained by the technical difficulties. However, given that
customers at various retail brokerage houses were able to get shares in the
hours leading up to the IPO, I would chalk that up to a dearth in demand.

~~~
jessedhillon
It's been well-documented that many orders went unfulfilled for hours on the
IPO day. That's the whole point of this article. Other than pointing to
Google, what's your substantiation for this claim that the massive drop
reflected the market's lack of confidence in FB's valuation?

~~~
veyron
For example, search for "facebook earning estimates before ipo"

[http://www.reuters.com/article/2012/05/22/us-facebook-
foreca...](http://www.reuters.com/article/2012/05/22/us-facebook-forecasts-
idUSBRE84L06920120522)

> In the run-up to Facebook's $16 billion IPO, Morgan Stanley, the lead
> underwriter on the deal, unexpectedly delivered some negative news to major
> clients: The bank's consumer Internet analyst, Scott Devitt, was reducing
> his revenue forecasts for the company.

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rdl
I'm sad the Google/WR Hambrecht OpenIPO thing wasn't even a consideration for
Facebook.

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rorrr
I'm shocked FB is still trading at P/E = 99. This is pure insanity. It's going
to collapse right after the first earning announcement.

