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Hedge Funder Who Bet $100 Million On Facebook IPO Is Furious

finance.yahoo.com

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Re: Hedge Funder Who Bet $100 Million On Facebook IPO Is Furious

#11

Post by waterlesscloud »

DigitalSea wrote: post #2

My favourite part was when the hedge fund manager called himself "blue collar". I couldn't care about the rest, boo hoo there were technical issues, NASDAQ had a clause covering them in the event of technical issues and Facebook stock didn't balloon into the $60 or $70 per share price range. I don't feel one ounce of sympathy for anyone who can freely gamble away $100M then have the audacity to complain about it, if…

The interesting allegation here is that NASDAQ required traders to dump a bunch of stock on Monday morning, which depressed the price artificially.

We'll never know the truth of it, but if it happened it's unfortunate.

Re: Hedge Funder Who Bet $100 Million On Facebook IPO Is Furious

#12

Post by veyron »

dos1 wrote: post #7

I have a hard time drumming up sympathy for these guys. They're mad because they couldn't make a quick buck. Isn't a hedge fund just gambling? It's high time Wall St. learns that it's never a good idea to put more in the pot than you can lose. The part that is most striking to me is that share price and a company's intrinsic value are seemingly in different galaxies. This guy is talking about decisions based on hype…

He is complaining because he was sandbagged. He didnt know what his position was, and NASDAQ and MS both dropped the ball here.

You can vilify hedge funds till kingdom come, but it sounds here that this guy played by the rules and lost due to a circumstance that he didn't believe was fair.

If the opposite happened (price spiked) yet the same technology problems happened, you'd have a bunch of people complaining that they were over or under filled.

The complaints would not be justified if there was no confusion on his position.

Re: Hedge Funder Who Bet $100 Million On Facebook IPO Is Furious

#13

Post by waterlesscloud »

zackzackzack wrote: post #9

"Anonymous Hedge Fund Manager: No doubt. But this should have been a blockbuster. This should have traded to $60 or $70. This should have launched a wave of tech IPOs." I think Facebook just deflated the tech IPO bubble for a year or so. No average Joe is going to invest, because, "Well fuck, if Facebook didn't explode, why would any other new tech company? No thanks." The bubble is still there, but it isn't looking…

I think it's longer than a year. It'll take something really huge to overcome "Well, if Facebook couldn't break out, who can?"

That will ripple back through all investment phases since the ipo is the dream payoff day for many investment rounds.

Re: Hedge Funder Who Bet $100 Million On Facebook IPO Is Furious

#14

Post by [deleted] »

sp332 wrote: post #5
DigitalSea wrote: post #2

My favourite part was when the hedge fund manager called himself "blue collar". I couldn't care about the rest, boo hoo there were technical issues, NASDAQ had a clause covering them in the event of technical issues and Facebook stock didn't balloon into the $60 or $70 per share price range. I don't feel one ounce of sympathy for anyone who can freely gamble away $100M then have the audacity to complain about it, if…

The hedge fund has $100MM, that doesn't mean he has $100MM. He's managing other people's money, he's not "freely gambling" with it.

[deleted]

Re: Hedge Funder Who Bet $100 Million On Facebook IPO Is Furious

#15

Post by hasker »

DigitalSea wrote: post #2

My favourite part was when the hedge fund manager called himself "blue collar". I couldn't care about the rest, boo hoo there were technical issues, NASDAQ had a clause covering them in the event of technical issues and Facebook stock didn't balloon into the $60 or $70 per share price range. I don't feel one ounce of sympathy for anyone who can freely gamble away $100M then have the audacity to complain about it, if…

Read the article. He is complaining about how the casino operated, not how he bet. One of the most crucial piecing of information in professional trading is knowing your exact risk position. NASDAQ apparently was unable to confirm whether trades were "done" or not. Having a uncertain $100mm exposure to something really scares a trader, since he cannot hedge it. This is the kind of situation where telephone hand pieces get snapped in half, and holes get punches through LCD screens. The flash crash a few years ago created a similar situation where the exchanges decided to cancel certain trades at their own discretion.

NASDAQ really botched the IPO. Trading was supposed to open at 11am, and it appeared to me it took until 11:20am to actually start. Problems persisted even after FB opened. They won the listing over the NYSE on the promise this sort of thing would not happen. Mega IPOs always seem to have a lot of drama. GOOG had a lot of stupidity with some interview Larry or Sergey did with Playboy, and I think a few other issues. Finally FB got to the end of the long road to going public.

Re: Hedge Funder Who Bet $100 Million On Facebook IPO Is Furious

#16

Post by veyron »

zackzackzack wrote: post #10
sp332 wrote: post #8

Earlier quoted context omitted.

You go to Vegas and put $5,000 on the roulette wheel and it breaks, it's like, hold on, I'm not going to do that. I like this analogy. You want to play the market, fine. But if NASDAQ breaks, is that really part of the game?

If they signed a legally binding agreement, then I imagine NASDAQ breaking would be part of the game.

The contracts absolve NASDAQ of liability in calamities of this nature (my business was almost destroyed -- had to take a 250K loss -- thanks to an order entry server failure), but it doesn't make you feel better.

Having had something similar happen to me, I know how much it sucks. You accept its a possibility, but don't really believe it will happen until it does.

Re: Hedge Funder Who Bet $100 Million On Facebook IPO Is Furious

#17

Post by hnwh »

Here's my favorite part:

" The question is will NASDAQ do the right thing. They made $400 million last year and could pay out some."

what the everloving...ffuuu.. I hear whine whine whine from the 99%, and now I hear whine whine whine from a freakin hedge fund manager who BET $100m on FB. IS this the state of affairs now? Country full of WHINERS??

Re: Hedge Funder Who Bet $100 Million On Facebook IPO Is Furious

#18

Post by sp332 »

zackzackzack wrote: post #10
sp332 wrote: post #8

Earlier quoted context omitted.

You go to Vegas and put $5,000 on the roulette wheel and it breaks, it's like, hold on, I'm not going to do that. I like this analogy. You want to play the market, fine. But if NASDAQ breaks, is that really part of the game?

If they signed a legally binding agreement, then I imagine NASDAQ breaking would be part of the game.

It depends on the agreement, and whether the NASDAQ guys could reasonably have known there was going to be trouble. I'm pretty sure that agreement only covers unforeseen problems, so if they knew something was funky, they might be liable for a lot more than $3MM.

Re: Hedge Funder Who Bet $100 Million On Facebook IPO Is Furious

#20

Post by jzycrzy »

sp332 wrote: post #5
DigitalSea wrote: post #2

My favourite part was when the hedge fund manager called himself "blue collar". I couldn't care about the rest, boo hoo there were technical issues, NASDAQ had a clause covering them in the event of technical issues and Facebook stock didn't balloon into the $60 or $70 per share price range. I don't feel one ounce of sympathy for anyone who can freely gamble away $100M then have the audacity to complain about it, if…

The hedge fund has $100MM, that doesn't mean he has $100MM. He's managing other people's money, he's not "freely gambling" with it.

Just to add to this comment. $100MM at 2% management fees, leaves $2MM for expenses (audit, legal, accounting), officers and staff. He probably makes most of his annual take in a performance bonus, which this 'screw up' probably reduced.

FWIW, my favorite part showing how these short term guys think: "we heard rumors there was a market in Europe for $70/share" fast forward to "this thing should have been trading in the $60 to $70 range." Based on a rumor from another continent.

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