Was initially indicated to open at 45, then 42. Opened at 42, climbed to 43 for about a second and has moved under 40 a couple of times.
Zynga down 13% (halted). Social Media etf getting spanked.
Edited: now has broken through 40 and is now nearly breaking 39.
Edited 2: now nearly breaking original offering price of 38.
Edited 3: hit 38 20 minutes into trading. This is not pretty. Anyone want to step in? lol.
Added: Seems to be some defense at 38, but geez, the way it opened I don't know who wants to step in.
Broke 38 very briefly, but now above slightly. Market no likey.
Edited: Now stabilizing under 39, but the amount of selling into the open was pretty remarkable.
Update: CNBC now saying initial fall was due to Nasdaq being "clogged" (lol, and now apparently other technical issues - nasdaq shares down.) Some orders may not have gone through (
http://www.zerohedge.com/news/think-you-bought-facebook-think-again), although the sells certainly seemed to go through.
At 38, FB stock was propped up by underwriters who came in to buy.
Back over 40 briefly then under and moving rapidly - 240M shares traded.
11:30 - now moving over 41, but kind of a technical mess at the open. Nasdaq stock now down nearly 5%.
Comments
I'm interested in the other worldly events that affect our holdings.
http://money.cnn.com/2012/05/18/markets/facebook-mutual-funds/index.htm
GSVC (whose manager was on CNBC this morning all excited) is down 16% on the day, SVVC down a "holy ****" 21%.
"For example, GSV Capital (GSVC), which invests in "high growth" pre-IPO companies, holds 350,000 shares of Facebook. That represents nearly 7% of its $167 million portfolio. GSV Capital also owns shares of Twitter.
Similarly, the $87 million Firsthand Technology Value Fund (SVVC) boasts 600,000 shares of Facebook, representing about 12% of the total portfolio. Online flash-sales company Gilt Groupe is also among the top holdings in the fund."
It looks like it's heading that way.
"Facebook Flop", "Facebook Unfriended", etc - I can imagine the headlines over the weekend.
SVVC now down 28% on the day. Zynga halted for almost 50 minutes twice, and down 15%.
This can be spun 18 different ways (and is currently), but it will stand as a real disappointment for those who thought this was going to bring the retail investor back. I mean, I went on a walk this morning and heard other people talking about buying at the open while I was walking, people at the coffee place, people at the drug store, etc. How this played out today probably just scared off more retail investors, but I'm really surprised that it played out this badly.
(Reuters) - For a company that is dramatically upending business strategies and social relationships around the world, Facebook Inc made a surprisingly modest debut on the Nasdaq on Friday as a sky-high valuation and trading glitches capped the stock's rise.
In late trading, Facebook shares were only a few cents above the company's initial public offering price of $38, after opening 11 percent higher, rapidly heading south to touch their initial price and then rebounding by several dollars.
{...}
But the stock debut took place in a weak market, and traders said the smaller-than-expected first-day pop reflected the very aggressive pricing of the offering and a last-minute, near 25 percent increase in the number of shares being sold. Analyst predictions of first-day gains had ranged from 10 percent to 50 percent.
"The increase in size was a big negative factor for us," said Tim Ghriskey, chief investment officer at Solaris Asset Management, who said he canceled some orders for the shares.
The IPO price was equivalent to more than 100 times historical earnings, compared with Apple Inc's 14 times and Google Inc's 19 times. For many investors that makes it a risky bet.
=====
Nice injection for cash-strapped California:
"Already, the influx of wealth arising from Facebook's extraordinary growth has helped drive a mini-boom in San Francisco Bay Area real estate, and income tax revenues related to the IPO will cut the state of California's budget deficit by an estimated $2 billion."
That said, I thought it would open in the mid-40's and push maybe mildly over $50. Maybe once the dust settles, it comes down from there. The fact that the underwriters had to defend 38 not once but twice is stunning.
Technically this was a mess (people still not getting confirmations), PR-wise this is a mess and I'm guessing the retail investors who actually did buy are likely not too excited going into the weekend.
The story does, at least for Jamie Dimon, take the headlines away from JPM (down again, along with C and AIG and a number of other financials) briefly.
"Like" !!!
"If it wasn't for Facebook I wouldn't be here," he said as he left the branch to go to his bank and transfer money into his new account. "I missed out on Groupon GRPN -6.69% when it went public, so I'm not going to miss the boat this time."
Journal Community
Mr. Hodges said he plans to invest $10,000 in Facebook shares—including $4,500 of his own money and $5,500 from his mother."
http://online.wsj.com/article/SB10001424052702303448404577411903118364314.html
Is everyone saying that Facebook won't monetize and dominate the new future of global social & marketing advertising genre - so to speak - and not be able to rise to a PE of 200 so that investors will be able to make some serious money?
Is Mark Z. not the Steve Jobs of Social Media Networking and who can turn a $38 stock price to $300+?
From article below, "...skeptical advertisers, a young management team about to become amazingly rich, a history of social-network flameouts, deep-pocketed competition and the privacy issue."
http://online.wsj.com/article/SB10001424052702303879604577408724178786822.html?mod=mktw#printMode
Edited to add: was under 37 for a while. Some discussion on CNBC that the pre-market trades will be broken if underwriters decide to come in to support 38 again.
Poking fun at the idea that FB will have world domination and the PE will rise further to nose-bleed and oxygen-mask territory.
A:) Retail investors puked it up. For a name that everyone was supposed to be excited about, everyone sure sold it in a hurry.
B:) There's a lot of retail investors who are still holding and are probably pissed.
C:) Actual allocation to retail is less than being said.
D:) There may have been a lot allocated to retail for the IPO, but once the stock opened, the majority who wanted shares had them and without buying interest, selling resulted in more selling.
Maybe a combination of the above or something else.
The two private equity funds down again - GSV Capital (GSVC) down 36% in 5 days. Firsthand Tech Value (SVVC) down about 34% in 5 days, and that would have been down further had it not announced NAV today.
"Facebook’s banks ended up owning 86% of the social networking site’s $16bn (£10bn) initial public offering after a lacklustre first day of trading in which shares ended marginally up on the opening price."
"As the first analyst to place a “sell” rating on the company emerged over Facebook’s $100bn (£63bn) mega-float, filings from the company revealed the true extent to which Wall Street underwriters were forced to prop up the shares on Friday.
A revised S-1 filing made with the US Securities and Exchange Commission disclosed that Facebook’s five key banks ended up owning $13.86bn. Morgan Stanley, its lead adviser, ended the day owning 162m shares, worth £6.16bn, followed by JP Morgan and Goldman Sachs, which ended the day with $3.2bn and $2.4bn holdings respectively. Bank of America Merrill Lynch and Barclays Capital each held $1.04bn stakes.
A significant proportion of the shares owned by the banks will have been bid for ahead of the float itself, as part of the banks’ underwriting duties, but a smaller proportion will have come from a result of the banks moving into the market on Friday to maintain the price above its $38-a-share opening level."
http://www.cnbc.com/id/47505908
"All the buy-side institutions are shorting it. You can get a borrow on it and everyone's leaning all over it. There's no bottom," Rovelli says. "The next catalyst is going to be earnings, which is three months away. So there's no reason to jump in here."
FB at nearly 100 times earnings and dropping! What are you buying? Something that in a year few will be using? Safer to bury your money in the backyard.
http://www.marketwatch.com/story/morgan-stanley-cut-facebook-view-before-iporeport-2012-05-22
NEW YORK (MarketWatch) -- The consumer Internet analyst at Morgan Stanley, the lead underwriter for last week's Facebook Inc., trimmed his outlook for the social-networking firm's revenues just days before the deal went live, Reuters reported Tuesday. The report said that the action, which it said was relayed to some of Morgan's major clients during Facebook's pre-IPO road show, came as a surprise to many potential investors so close to the stock's debut. Reuters explained that the cut came after Facebook released an updated prospectus ahead of the share sale that cautioned about revenue-growth challenges presented by a shift to mobile devices.
It's pretty hard to believe that many of the so-called "small" investors so frequently mentioned are not of the same breed that thought that they could beat the housing bubble. Hey! Easy money! A quick buck! No experience, thought, judgement, or knowledge needed! Step right up, folks, see the painted lady!
Mo, you most likely think that because I am a "liberal" (whatever that's supposed to mean) I am of the mindset that "the gummint" should be right there at all times to watch over each and every one of us. No sir, I don't. To me, there's a big difference between sophisticated "professional" financial ripoffs, utilizing disinformation, co-option of regulation, of a size and managed in such a manner as to potentially require taxpayer backup in case of failure, and a plain old carny game like the Facebook IPO.
An excerpt from a ⇒ Reuters article:
"As bad as the declines have been, though, a view persists that the stock remains overvalued.
Monday's closing price of $34.03 implied a 24 percent annual growth rate for Facebook earnings over the next 10 years -- a rate that would rank above 90 percent of the companies in that industry.
Thomson Reuters Starmine, meanwhile, more conservatively estimates a 10.8 percent annual growth rate -- almost exactly the mean for the technology sector -- which would value the stock at $9.59 a share, a 72 percent discount to its IPO price."
With investing, nothing's easy. You know that, I know that, and so does every single MFO poster or reader. If investing was easy, there would be no need for MFO.
Emptors still need to caveat. That's life.
Regards- OJ