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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

#61

Post by a3d6g2f7 »

stewartbutler wrote: post #51

I still don't understand why Facebook has such an overblown valuation to begin with. The entire business is a house of cards based on the possibility that it might make someone else some money someday. Sure, there are some vultures like Zynga that make out like bandits preying on people with addictive personalities who shell out cash, and I'm sure there are a few success stories regarding successful social media adve…

Well, there's another article from Blodget on this fiasco that will soon hit the front page here.

The NASDAQ snafu is one thing. A class action suit has been filed.

But there has also been a class action suit against FB, alleging securities fraud.

We don't have all the facts yet, but what we've got so far is enough to demand to know more. I think a court will agree.

Bad PR all around for the FB. FB, the business, is doomed. They already knew that. They just didn't tell you, the investor.

Maybe we should demand an ad-free FB. Advertisers are going to be pulling out anyway. And without ads, they could give us more privacy.

Poetic justice.

Where's that Like button?

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

#62

Post by olefoo »

stewartbutler wrote: post #51

I still don't understand why Facebook has such an overblown valuation to begin with. The entire business is a house of cards based on the possibility that it might make someone else some money someday. Sure, there are some vultures like Zynga that make out like bandits preying on people with addictive personalities who shell out cash, and I'm sure there are a few success stories regarding successful social media adve…

Facebook has the biggest and most metadata rich direct marketing list ever created?

Facebook has not even begun to do the things they could with the knowledge they collect every day. In theory you should be able to go to one of Facebook's ad sales pages and order an ad that will be shown exactly three times to every left-handed piano player in Ohio. That you can't do that in the next ten minutes means that Facebook is leaving money on the table. They don't need to compete with Google, they need to compete with Experian and Transunion, or they need to come up with a way to provide a compelling "We manage your online data for you." offering that a majority of their users would pay for.

Facebook is, right now in a fairly enviable position; there are many things that they could potentially become, they are not hamstrung by the need to keep a cash cow fed and they have enough resources to try multiple experiments at scale.

I wouldn't count them out as a driving force on the web just yet.

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

#63

Post by marshray »

AznHisoka wrote: post #27
veyron wrote: post #12

Earlier quoted context omitted.

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…

Problem is there's no rules. Noone got in any legal trouble over at NASDAQ. People do insider trading without getting caught. It's a rigged game.

I'd say former Nasdaq chairman Madoff got himself in a little legal trouble, though perhaps that was after he left Nasdaq.

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

#65

Post by joezydeco »

minimax wrote: post #60
veyron wrote: post #12

Earlier quoted context omitted.

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…

What gets me is how mysterious it sounds, when there is a ton of obvious troubleshooting that should have happened... and probably did but I can't find reported anywhere. Hedge fund places order. NASDAQ returns an order id. Did that order show up in the market data feed? Did they see that order get hit on the market data side? Did they get an order accept? Did they try to cancel? What happened when they tried to canc…

Black hole sounds about right. Apparently NASDAQ's systems went completely quiet for 17 seconds centered around the 11:30am open of Facebook:

http://www.nanex.net/aqck/3122.html

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

#66

Post by helmut_hed »

tibbon wrote: post #21

If he admits that it never had a shot, why did he invest in the first place? Additionally, would we be feeling bad for Facebook if they had underpriced the IPO and the trader had made 25% profit on day one (and Facebook lost out on a potential 25% of fundraising)?

I'm glad to hear someone say this. Facebook the company did amazingly well on this transaction. A stock that pops is one that has left money on the table. FB did the opposite...

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

#67

Post by jroseattle »

Given how tight and controlled the shares distribution was by Morgan Stanley, how eff-ed up the orders to NASDAQ went, and the resulting decline in value over the last few days -- basically it seems that Wall Street bankers are the ones who were screwed. All I can say is -- what goes around, comes around.

They finally did it to themselves. For all the complaints about future regulatory needs, the Street never once considered that it might actually protect someone they're interested in -- themselves. Trust in the market has never been lower, thanks to the very folks that benefit from it. Now, not only are government agencies pissed off and investigating, but the traders are going to start pointing fingers at each other.

Tsk, tsk Wall Street -- prepare to hunker down. Karma's a bitch, boys. Who knows, when it's all said and done, maybe Facebook will end up actually helping Main Street.

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

#68

Post by jlarocco »

mbreese wrote: post #58
powera wrote: post #40

This 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.

There very well may have been buyers on Friday who thought the stock was worth $70. If the market had been able to handle the volume, then we may very well be seeing FB at $70 today. However, since we know that the market couldn't handle the volume, it most certainly did affect the share price on Friday. Now, you let people sit and think about this over the weekend and they may have different feelings about that supp…

Well, honestly we'll never know for sure, but if a weekend of "thinking it over" cuts the price in half, did it really deserve the $70 valuation? After the hype, people are going to think it over at some point, right? Maybe it's better that it happened right off the bat.
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