TCTI: Too Crazy Too Ignore
 Dave Ross

Thank you Facebook

May 23, 2012 @ 8:44 am (Updated: 10:49 am - 5/23/12 )

cedargrove

Dave Ross was THIS close to picking up Facebook stock. (AP Photo/Mark Lennihan)

I don't follow the stock market that closely. But I do look at my monthly statement, and I will admit I've always been a little disappointed that after all this time it shows that I'm still solidly middle class.

I would have thought that by now I'd be able to endow a modest professorship, or do a little dressage -- and I always blamed the fact that my broker never got me in on an IPO.

I missed Microsoft, I missed Apple, I missed Amazon, I missed Google, and so I figured my last chance to win an IPO payday was Facebook.

I was this close to picking up the phone and telling my adviser,'I don't care what you say, buy Facebook! Zuckerberg's a genius, demand is high, it's all anyone talks about here at work, they made a movie about it, it can't lose -- plus since the big crash I'm sure there are rules to protect investors.' Then today, I hear Rebecca Jarvis report on allegations that:

"The lead banks on the deal cut Facebook's revenue forecast just days before it went public, but only shared the information with a select few."

And then what did these banks allegedly do?

"Morgan Stanley increased Facebook's offering price and the size of the deal signalling greater demand at a higher price," said Jarvis.

So they took a product they allegedly knew was losing value, and made it look like it was worth more.

Where have we heard that before?

Anyway, as I say, I came very close to saying 'Buy Facebook,' but at the last moment I got distracted by some free pizza in the newsroom.

And thank goodness, because the Facebook stock chart looks like one of those compostable eco-spoons that melt in your soup. So thank you Facebook, for reminding us that the the only secure place to put your money is under a big rock.

By the way, I'll be happy to sell you shares in my rock. $38 a share.

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Comments (24)


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  • kata wrote...
    I
    May 23, 2012 1:22 pm
    probably the least stupid thing I've ever done :)

    I think FB will go the way of the hula hoop.

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  • kata wrote...
    oops I've been edited
    May 23, 2012 1:23 pm
    my (heart) marker got redacted. Anyhoo. I love my piddly few MS stocks.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • Pete in Seattle wrote...
    Investing vs speculating
    May 23, 2012 3:09 pm
    Real investors will wait a few months and then see if their investment paid off. Speculators "take a flyer" and hope, but are really looking for the quick rise or fall so they can cash in and remove capital from the market. It seems to me that those who did not get instant gains are speculators who never had any intent of leaving money in FaceBook and watching it grow over time. I believe the value range by analysts in the weeks leading up to the IPT was $24-$28, but jumped to $36 during the final 10 days or so due to demand. This is not inside information. If I paid $36 for something that was consistently valued at 2/3 that, then that is my fault. Not even one week has gone by and Congress is already investigating why some investor did not get rich quick. The whole idea of an IPO is to raise capital for the enterprise so they can perform better. To do so the firm relinquishes some portion of future profits, which are not guaranteed. The early days of a newly offered company are volatile and a true market price and value will take months to settle out. Some companies explode then come back to reality, others drop half their value than climb back up. And in both cases the longer term level is often (but not always) higher than the initial offering. One question to ask the analysts being investigated is this: was the supposed inside info "new" or was it a restatement of what had been said in the weeks leading up to the IPO?
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  • Daddy Dennis wrote...
    So GOOD!
    May 23, 2012 4:47 pm
    This was some of your best stuff, Dave. I was rolling.

    No! I don't want stock in your rock!

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  • fartforce1 wrote...
    Its a cycle. is it a fad? YES, and it will be replaced by somethng better..sooner,if it dont evolve the right way for its followers likes..
    May 24, 2012 3:33 am
    probably three years from now, everyone will be into the next thing and FB will be worth aboth three bucks. But first FB will buy a zillion different start plus waste much money on other start ups and once they start charging the user WHAMO! They sink and die!
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