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Facebook closes at $38.23 first day NASDAQ trading, above IPO price $38.00

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Re: Facebook closes at $38.23 first day NASDAQ trading, above IPO price $38.00

#41

Post by AndyIngram »

state_machine wrote: post #17
loumf wrote: post #2

On the one hand, this indicates that the underwriters did a good job of maximizing FB private shareholder value on the IPO. On the other, the shape of the daily curve looks like it was supported at that level artificially. Even if not, it doesn't look like there's a lot of market confidence for it at this level.

This is the greenshoe option at work: When the price is determined, the shares are ready to publicly trade. The underwriter has to ensure that these shares do not trade below the offering price. If the underwriter finds there is a possibility of the shares trading below the offering price, they can exercise the greenshoe option. http://www.investopedia.com/articles/optioninvestor/08/green...

No its not. Over allotments are to stabilize the lack of sellers above the offering price and to raise additional capital for the issuer. It could be a reason for the price returning to $38 but most likely that was not why either. The buys at $38 can be explained by other factors like orders from people or funds who did not get all or any of their requested allotments and had resting orders at 38. Overall the markets are skittish and the price range is high based on current earnings but there is so much potential future earnings, I think we will see much higher prices if not right away some time in 2013.

Re: Facebook closes at $38.23 first day NASDAQ trading, above IPO price $38.00

#43

Post by squeee »

state_machine wrote: post #17
loumf wrote: post #2

On the one hand, this indicates that the underwriters did a good job of maximizing FB private shareholder value on the IPO. On the other, the shape of the daily curve looks like it was supported at that level artificially. Even if not, it doesn't look like there's a lot of market confidence for it at this level.

This is the greenshoe option at work: When the price is determined, the shares are ready to publicly trade. The underwriter has to ensure that these shares do not trade below the offering price. If the underwriter finds there is a possibility of the shares trading below the offering price, they can exercise the greenshoe option. http://www.investopedia.com/articles/optioninvestor/08/green...

So... get short on FB?

Re: Facebook closes at $38.23 first day NASDAQ trading, above IPO price $38.00

#44

Post by alttab »

dsil wrote: post #20
rorrr wrote: post #7

I really don't get why FB is valued that much. If you look at their revenues, net income, quarter-to-quarter growth, the stock should be at $5.50. Seriously, look at GOOG, compare it to FB. You must be insane to buy FB.

Buying stock is generally about what you think will happen in the future, not what has happened in the past.

Unless you are talking about the ability of existing management to make positive changes in the future.

Re: Facebook closes at $38.23 first day NASDAQ trading, above IPO price $38.00

#45

Post by mratzloff »

sukuriant wrote: post #29
its_so_on wrote: post #13

(EDIT: Earlier this title read "barely above it's IPO price". It definitely used this word, "barely". My comment is now moot. I'm leaving it due to the replies.) what is with this title? It sounds like it's saying sullenly, "a year later, Facebook is barely above its IPO price". OF COURSE IT'S TRADING AROUND ITS IPO PRICE, GIVEN THAT IT'S JUST IPO'D. I mean, of ALL the times a company could be trading at its IPO pric…

The more interesting thing is: "It didn't plummet like some people were expecting!!!"

Wait until employees start dumping their stock.

Re: Facebook closes at $38.23 first day NASDAQ trading, above IPO price $38.00

#46

Post by joering2 »

dkulchenko wrote: post #35
gojomo wrote: post #10

Earlier quoted context omitted.

More evidence of artificial support, a tweet and screen capture from Paul Kedrosky: http://lockerz.com/s/209964861 It's easy to overlook the graphic; it's the thin black bar with faint text. It shows: Bid (size): 38.00 (x9999900) Ask (size): 38.01 (x146300) ...and the tweet referencing it was about 20mins before the close. The earlier tweet was: @pkedrosky: Watching certain underwriters try to keep certain IPOs above…

Pardon my ignorance, but what do the quoted numbers mean?

It means that underwriters were putting lots of stocks to buy at the exact $38 level so that this will scare people away from selling (oh wow such a huge position someone wants to buy [$38 x 9999900 shares == $379,996,200], there is no chance someone will buy that much of a shares [and therefore stock will plunge deeper], so I better stick to my own shares and not sell).

They build rather fake barricade.

edit: depends how the big fish will play, you may see none of these Monday morning. Its probably just a hand of underwriters keeping 80% of that shares. If they withdraw, you may see only 25000 shares at $38, for example [so it will be much easier for the stock to go deeper].

Re: Facebook closes at $38.23 first day NASDAQ trading, above IPO price $38.00

#47

Post by zeroonetwothree »

rmATinnovafy wrote: post #33
dsil wrote: post #20

Earlier quoted context omitted.

Buying stock is generally about what you think will happen in the future, not what has happened in the past.

No, sir. Speculating is about what you think will happen. Buying stocks in a business is about buying into something that has shown to be profitable, and stable. Enough to exchange your hard-earned money for it. Read "The Intelligent Investor" by Benjamin Graham to gain a better picture of what investing really is.

This is basically the age-old debate between "growth" vs. "value" investing. Either side has some arguments; personally I prefer to stay out of it.

Re: Facebook closes at $38.23 first day NASDAQ trading, above IPO price $38.00

#48

Post by nextparadigms »

earl wrote: post #3
loumf wrote: post #2

On the one hand, this indicates that the underwriters did a good job of maximizing FB private shareholder value on the IPO. On the other, the shape of the daily curve looks like it was supported at that level artificially. Even if not, it doesn't look like there's a lot of market confidence for it at this level.

here's the pricing chart for today [1]. What makes you think it was supported -- the flat line beginning at 334 pm? [1] http://finance.yahoo.com/echarts?s=FB+Interactive#symbol=fb;... ;

I watched it go to down to 38.00, and then went up again 0.01, 0.02, etc, slowly. I don't think it dropped at all under 38.00, and it was most likely manipulated.

Re: Facebook closes at $38.23 first day NASDAQ trading, above IPO price $38.00

#49

Post by joshz »

loumf wrote: post #2

On the one hand, this indicates that the underwriters did a good job of maximizing FB private shareholder value on the IPO. On the other, the shape of the daily curve looks like it was supported at that level artificially. Even if not, it doesn't look like there's a lot of market confidence for it at this level.

They did. http://www.bloomberg.com/news/2012-05-18/facebook-underwrite...
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