Why did't he buy class A shares before the IPO. Idiot.
Hedge Funder Who Bet $100 Million On Facebook IPO Is Furious
41–50 of 127 posts
Re: Hedge Funder Who Bet $100 Million On Facebook IPO Is Furious
#42Earlier quoted context omitted.
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 piece…
> "He is complaining about how the casino operated, not how he bet." This is exactly right. I have no sympathy for a gambler who gets beat because he made the wrong read or the wrong play. I have no sympathy for a trader who loses money because he was wrong about the market. But when a gambler gets beat because the casino kept misdealing the cards, or a trader loses big money because the exchange botched the trade, h…
As the article points out, technical glitches are covered in the rules. When you invest you accept these rules, if the hedge fund manager has a problem with the rules then he should not be investing. Therefore no rules were broken as the article points out, it's a stock exchange they aren't dumb they know how to cover their bases (they're bankers after all). He isn't the only one affected by this situation.
The bottom line is he would have lost money regardless of NASDAQ's handling of the situation, Facebook stock flopped. This guy needs to cut his losses and take it like a man, he isn't the only one who invested in Facebook stock and lost out, I wouldn't rule out others losing larger sums of money too ashamed to even anonymously come forward.
It might sound spiteful, but it's life. Unexpected things happen like these and there's nothing that can be done. I'm sure the SEC will be investigating everything shortly anyway, so we'll see what happens (if any action is taken, which is possible).
Re: Hedge Funder Who Bet $100 Million On Facebook IPO Is Furious
#43Earlier quoted context omitted.
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 piece…
> "He is complaining about how the casino operated, not how he bet." This is exactly right. I have no sympathy for a gambler who gets beat because he made the wrong read or the wrong play. I have no sympathy for a trader who loses money because he was wrong about the market. But when a gambler gets beat because the casino kept misdealing the cards, or a trader loses big money because the exchange botched the trade, h…
Even gamblers are subject to operational risk. If an earthquake knocks over your stack of chips, poopers...
To think fb would have popped to 70 had it not been for a glitch is manufactured lunacy.
Re: Hedge Funder Who Bet $100 Million On Facebook IPO Is Furious
#44I love this story on so many levels.
Firstly there is the irony of a "blue collar hedge fund manager"
There's the fact the lack of an IPO bump means Facebook equity holders are the people who made money out of it, instead of the investment banks buying at the opening and hoping to sell at the bump price.
Then there's the whole "HN thinks Facebook is worthless and has the satisfaction of seeing the stock drop on the opening day." thing. Now it turns out all the self-congratulation over people's "insightful analysis" was probably misplaced - Facebook may or may not be overvalued, but the stock price probably doesn't reflect the market consensus yet.
Finally, in an ironic twist Shakespeare would have been proud of it turns out that it was probably the NASDAQ's computer system that meant Facebook missed an IPO bump. Silicon Valley loves talking about how Wall St over-hyped IPOs during the dot-com bubble and blaming it for the lack of a significant IPO exit strategy since. Now it was a computer system that failed Silicon Valley's great hope of reigniting the IPO market.
Re: Hedge Funder Who Bet $100 Million On Facebook IPO Is Furious
#45I love this story on so many levels. Firstly there is the irony of a "blue collar hedge fund manager" There's the fact the lack of an IPO bump means Facebook equity holders are the people who made money out of it, instead of the investment banks buying at the opening and hoping to sell at the bump price. Then there's the whole "HN thinks Facebook is worthless and has the satisfaction of seeing the stock drop on the o…
You should adapt this for the stage!
Re: Hedge Funder Who Bet $100 Million On Facebook IPO Is Furious
#46Earlier 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.
If you're a small fry then your broker will probably assume the risk. If you're a big guy, like it sounds like this guy is, then he should know he assumes the risk. Buying and selling in a market carries some credit/counterparty risk. NASDAQ probably handled this poorly (Seriously, did they ask traders to be honest and self-report their trade executions as part of the official books of record?!?!), but this guy's fund will be on the hook until it all gets settled out if it does at all.
EBay's an open market with buyers and sellers and people just take it for granted they'll get screwed by EBay/PayPal at some point in their lives. I understand that there is probably more at stake in the NASDAQ than on EBay, but their Risk/Compliance department should have advised the principles of his fund to hold some capital off to the side for a situation like this.
Re: Hedge Funder Who Bet $100 Million On Facebook IPO Is Furious
#47My 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…
To plenty of us in the tech field a successful Facebook IPO would have opened up a path for other tech business to IPO in the near term. On top of that a successful IPO would have opened up some funding in our hacker space (Paypal Mafia/Google Mafia..etc). We want them to be successful.
Seems to me it's a very good thing none of that happened. The VC scene was already pretty damn irrational and dysfuntional, and in sore need of some unpleasant reality injection.
Re: Hedge Funder Who Bet $100 Million On Facebook IPO Is Furious
#48This guy is a moron. Anybody who believes the stock would be at $70 if "the market" worked better doesn't understand how markets work in theory or practice. If there are people who really believe the stock is worth $70, there would have been buyers the past two days. Expecting "hype" around the IPO to support ONE HUNDRED BILLION dollars of extra valuation is beyond stupid.
I am imagining this "hedge fund manager" as some guy who had a fair amount of wealth - but a greater, wealthier, social network. He spent some time pulling from this network to develop a fund, which he would manage to make all his friends rich, himself even richer.
He has been frothing for this opportunity, ever since he missed the Google boat. At the time of the goog ipo, he was a lowly broker with little funds to leverage.
Since then he has been viciously ambitious. He has built a name for himself and a powerful, if flawed, circle of acquaintances.
He was successful in frothing up his circle, convincing them that he could make an FB focused super fund and make them a killing!
He gathered up $200MM from his network and put a crazy bet on the stock.
He lost - all his credibility gone, a loss which was thought to be a sure thing. He is ruined!
Especially since now that the loss is here - it will be revealed that he committed many millions to purchases on this expected cash cow!
His bills are due, and he owes $30MM TOMORROW for everything he used funds from his network's input to pre-buy!
HE IS FUCKED!
But, he has a really nice yacht to attempt to flee to Bermuda on...
Re: Hedge Funder Who Bet $100 Million On Facebook IPO Is Furious
#49I'm gonna call fake on this.
Re: Hedge Funder Who Bet $100 Million On Facebook IPO Is Furious
#50Earlier quoted context omitted.
Is there really any meaning left in the term bubble if a bubble can deflate?
In terms of inflating/deflating, then calling it a balloon might be more apt. Generally bubbles don't even inflate they just exist or pop.
Sounds like you've never seen a soap bubble circus act...