

Citi lost $20M on Facebook IPO - jsherry
http://www.reuters.com/article/2012/05/25/facebook-citigroup-idUSL1E8GPANM20120525

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sigkill
Can't we all rest at peace knowing that the facebook guys priced it perfectly
and raised the maximum amount of money they could and these high frequency
traders and investment bankers couldn't manage to play on perception to make
their share of quick money that they've been doing at every IPO.

This almost seems to me like they want to play on public perception to somehow
bring the price to a higher number and then sell it. Is that why the news is
filled with facebook this, facebook that?

Almost sounds like a conspiracy theory.

~~~
antrix
It is being argued that these losses aren't just vanilla trading losses. They
arose due to technical glitches at NASDAQ which led to quotes being
unavailable, delayed processing order cancel requests, missing acks, etc.

Essentially, traders couldn't act in time to react to the market due to
NASDAQ's troubles.

Edit: I should also add that Citi, Citadel, etc. were acting as market makers
- they don't have the option of holding the stock for recovery as others in
this thread suggest.

~~~
astrodust
Are we supposed to feel sorry for the poor market maker? They were trying to
skim an enormous profit and ended up with a small loss. Ç'est la vie.

~~~
sseveran
When AWS goes down people get angry. When NASDAQ goes down different people
get angry.

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RockyMcNuts
UBS, Citadel, Knight also announced losses, bringing total market maker losses
to around $115m:

[http://www.reuters.com/article/2012/05/25/us-facebook-
nasdaq...](http://www.reuters.com/article/2012/05/25/us-facebook-nasdaq-
losses-idUSBRE84O18S20120525)

A longer read on all the Nasdaq glitches
[http://www.reuters.com/article/2012/05/26/us-facebook-
proble...](http://www.reuters.com/article/2012/05/26/us-facebook-problems-
idUSBRE84P00Y20120526)

Hard to know the counterfactual, but if the IPO had a clean start and some
traders hadn't been scared to the sidelines by not knowing if trades were
going through on NASDAQ, the stock might have traded up. If it looks like
everybody's buying, people hop in. If it looks like a dud, people hold off.
Social proof is a powerful thing.

In the long run, the market is a profit-weighing machine, not a voting
machine, so a few opening trades shouldn't really matter.

On the other hand the perception of a hot stock and company impact ability to
hire, acquire etc. Remember how a Yahoo stock drop nixed their handshake
agreement to acquire Facebook. The stock price can impact the business and, in
an extreme case, create the reality it tries to measure.

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endlessvoid94
They only lost it if the stock doesn't recover. And...it's been less than a
week.

Everybody, everywhere, just needs to take a goddamn breath.

~~~
nknight
No, in many cases these are actual, realized losses, as in "we bought at this
price and sold at this much lower price". They have no money, and no stock.
Recovery of the stock is irrelevant to them.

~~~
RollAHardSix
Well they shouldn't have bought it. Sorry but that's capitalism and the way
the market works. If you invest, you invest in the possibility of it going
down.

Day and Short-termers should have known it wasn't going to do well. For me,
this stock was literally the Grinch. And long-term investors well it certainly
hasn't been long-term yet now has it.

But really, why anyone bought any Facebook stock...I'm just clueless.

