

Facebook sinks as Nasdaq scrambles to square trades - nextstep
http://www.reuters.com/article/2012/05/21/net-us-facebook-struggle-idUSBRE84J0D620120521

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joezydeco
_"As the stock fell, there was a long list of questions -- ranging from
whether the underwriters priced the shares too high..."_

I understand there needs to be a fine line between leaving money on the table
and having a pop at the open. But who is the IPO process supposed to _really_
benefit? If it's Facebook, then thumbs up for pricing it just right. If it's
the underwriters and insiders, then thumbs up for pricing it just right.

~~~
malandrew
So true, quite frankly I'm so dumbfounded that IPOs are seen as a "gift" to
Wall Street so they can make some quick cash for contributing absolutely
nothing of value.

IPO is nothing more than a transaction between two conterparties that is
supposed to be mutually beneficial. The ideal IPO should go sideways. i.e. no
money left on table and investors aren't ripped off. It should continue to
move sideways until additional material facts emerge that cause it to be
revalued by investors.

I wish the WSJ, Bloomberg, and all the talking heads would celebrate a
sideways moving IPO as a success because that's what it is. Since they only
write from the other side of the table (investors) they can't consider
anything but walking away with free money like bandits as a "success", when
success should be getting equity at a fair price for the long term. Success
should come 1+ quarters from the IPO date.

~~~
joezydeco
It should be _more_ than ~1 quarter from the IPO date, because otherwise
you're playing the second game of Analyst Expectations. A bunch of outsiders
get to predict what will happen and then all tsk tsk when the outcome doesn't
happen as they say.

Thankfully some companies like Apple seem to sandbag what they're going to
predict instead of being super-optimistic and then get slapped around when
they miss by a $0.01/share.

~~~
malandrew
Totally agree, but as a slight counterpoint you need to remember that (1) they
recently missed earnings expectations due to weaker than expected mobile
advertising revenues, and (2) things move really fast in this industry. Given
how critical mobile revenues are going to be to Facebook's future, I'd say
these near-term material facts are relevant beyond a simple game of analyst
expectations.

~~~
joezydeco
Things move fast in _all_ industries these days, that's no excuse to
hypermonitor Facebook's earnings. If you were a JP Morgan shareholder, you'd
agree that surprises happen everywhere.

~~~
malandrew
True.

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azundo
_"I basically told people they weren't going to get any, and luckily, it
proved to be a bust," the adviser said._

Seems like this type of attitude is part of the problem as well. If everyone
is assuming they will make a quick dollar, then certainly the underwriters
will price things high. If people are investing for long term value then you
can't exactly call FB a "bust" quite yet.

~~~
jinushaun
That's why investing in stocks is more like playing a game of poker. As the
saying goes, you don't play your hand (company performance), you play the
other players' hands (investor sentiment). So the raw performance of a company
is not as important a metric for deciding to buy or sell as the opinion of
other investors.

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maybird
Is it too late to short the stock?

~~~
dpapathanasiou
Not at all: [http://www.reuters.com/article/2012/05/18/us-facebook-
shorts...](http://www.reuters.com/article/2012/05/18/us-facebook-shorts-
idUSBRE84H0NH20120518)

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bartl
The article seems to have been deleted. I wonder why.

