Facebook IPO

Out of context: Reply #154

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  • Josev0

    http://www.thedailybeast.com/new…

    From the link:

    "Facebook’s IPO was a disaster from the moment shares began trading on May 18. They were priced too high, and too many of them were on the market, so instead of getting the typical IPO “pop,” Facebook’s stock swooned. Then came a bombshell that the company, worried about a weakening business, had quietly warned Wall Street analysts to lower their projections in the days before the IPO. Privileged clients got the news and backed away from the stock, while everyone else remained in the dark and rushed in to buy the shares. Some early-in-the-day investors lost 25 percent overnight."

    "None of this is the right image for a company that is trying to convince 900 million users that it can be trusted with their personal information. “I have no doubt that this is going to hurt their business,” says Vivek Wadhwa, a research fellow at the Rock Center for Corporate Governance at Stanford Law School. “Facebook has gone from being a darling to being a villain. Zuckerberg went from being seen as this child-genius rock star to being seen as a thief. People have lost their savings.”

    "Now the finger-pointing has begun. The Securities and Exchange Commission and the Financial Industry Regulatory Authority are investigating, as are U.S. House and Senate committees. Investors are filing lawsuits against Facebook and its bankers for the “selective disclosure” of the bad news before the offering, with one law firm also questioning the fact that two days before the IPO, several insiders, including two Facebook board members, decided to sell more shares than they originally intended."

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