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Facebook Not Feeling Friendly With Nasdaq

dealbook.nytimes.com

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Re: Facebook Not Feeling Friendly With Nasdaq

#21

Post by jessedhillon »

veyron wrote: post #17
jessedhillon wrote: post #14

Earlier quoted context omitted.

Don't you think you should provide some evidence for your claim?

Which part? "Everyone is blaming NASDAQ for issues that are not inherently NASDAQ's fault." The IPO was delayed during the day because of Morgan Stanley (asking customers not to dump at the open). NASDAQ is not buying shares and hence is not required or expected to bring demand to the table. The IPO "flopped" not because of the exchange but because demand wasn't there. That demand wasn't there was established in many…

It's been well-documented that many orders went unfulfilled for hours on the IPO day. That's the whole point of this article. Other than pointing to Google, what's your substantiation for this claim that the massive drop reflected the market's lack of confidence in FB's valuation?

Re: Facebook Not Feeling Friendly With Nasdaq

#22

Post by cynicalkane »

powertower wrote: post #20
pkteison wrote: post #15

Earlier quoted context omitted.

It is referred to as botched because it actually was - NASDAQ actually broke during the initial day of trading. Initial start of trading was delayed, then trades went through didn't get confirmed for -hours-, which is something of a disaster. This isn't some figurative use of the term, nasdaq actually failed in the objective sense. NASDAQ's chief basically saying his company sucked: http://www.bloomberg.com/news/2012…

You're forgetting the part where NASDAQ told every major player to sell the Facebook shares they had, if they wanted to get in on some of that 40 million in compensations (you had to fill in the sold-at price on the form, or forget about it).

Can you clarify or provide a source?

It's not clear what you're saying, or why it's bad. If you're saying that traders need to have sold shares to get compensation, well, should NASDAQ just compensate everyone who says they didn't sell shares but were planning to, cross their heart and hope to die?

Re: Facebook Not Feeling Friendly With Nasdaq

#23

Post by cynicalkane »

veyron wrote: post #13
JoshTriplett wrote: post #12

Earlier quoted context omitted.

Edit: Thanks to the responses that pointed out that the 500 private investor limit did not force the IPO, just a pile of disclosure requirements and other restrictions; apparently some of the news sources I'd originally read had not quite grasped that point either. The main point still stands, though: Facebook had a larger-than-normal set of private investors and brokers that did quite a bit of trading at IPO-time. F…

Facebook was not required to go public. I've posted this many times, including http://news.ycombinator.com/item?id=3753915 They were required to make disclosures but no one forced them to go public. Plenty of companies have more than 500 shareholders yet still opt to remain private. > Companies with more than $10 million in assets whose securities are held by more than 500 owners must file annual and other periodic r…

A company forced to file these reports essentially has all the costs of being a public company. There's absolutely no reason not to go public at this point, to benefit existing shareholders. The average op-ed writer is ignorant about finance but this is what is meant when informed people talk about companies being forced to go public--they're forced to take on all the costs of being public, so might as well just IPO.

Re: Facebook Not Feeling Friendly With Nasdaq

#25

Post by veyron »

cynicalkane wrote: post #23
veyron wrote: post #13

Earlier quoted context omitted.

Facebook was not required to go public. I've posted this many times, including http://news.ycombinator.com/item?id=3753915 They were required to make disclosures but no one forced them to go public. Plenty of companies have more than 500 shareholders yet still opt to remain private. > Companies with more than $10 million in assets whose securities are held by more than 500 owners must file annual and other periodic r…

A company forced to file these reports essentially has all the costs of being a public company. There's absolutely no reason not to go public at this point, to benefit existing shareholders. The average op-ed writer is ignorant about finance but this is what is meant when informed people talk about companies being forced to go public--they're forced to take on all the costs of being public, so might as well just IPO.

They are forced to take some of the economic costs of being public, but the managers have much more flexibility when the company is private. For example, Facebook's acquisition of Instagram would not fly if FB were public when that happened.

You can argue that the paperwork is onerous, but its paperwork. The headaches involved with public companies go far beyond a few paltry reports.

Re: Facebook Not Feeling Friendly With Nasdaq

#26

Post by veyron »

cynicalkane wrote: post #22
powertower wrote: post #20

Earlier quoted context omitted.

You're forgetting the part where NASDAQ told every major player to sell the Facebook shares they had, if they wanted to get in on some of that 40 million in compensations (you had to fill in the sold-at price on the form, or forget about it).

Can you clarify or provide a source? It's not clear what you're saying, or why it's bad. If you're saying that traders need to have sold shares to get compensation, well, should NASDAQ just compensate everyone who says they didn't sell shares but were planning to, cross their heart and hope to die?

If you are arguing that you were damaged specifically because of technical glitches associated with the IPO, you are expected to sell the shares. Any price action after that is due to factors outside of NASDAQ's direct control, and there's a sense in which you are taking risk by continuing to hold.

(Otherwise, everyone would sue whenever a stock price moved -- shareholders complaining when prices fall and short parties complaining when prices rise)

Re: Facebook Not Feeling Friendly With Nasdaq

#27

Post by veyron »

jessedhillon wrote: post #21
veyron wrote: post #17

Earlier quoted context omitted.

Which part? "Everyone is blaming NASDAQ for issues that are not inherently NASDAQ's fault." The IPO was delayed during the day because of Morgan Stanley (asking customers not to dump at the open). NASDAQ is not buying shares and hence is not required or expected to bring demand to the table. The IPO "flopped" not because of the exchange but because demand wasn't there. That demand wasn't there was established in many…

It's been well-documented that many orders went unfulfilled for hours on the IPO day. That's the whole point of this article. Other than pointing to Google, what's your substantiation for this claim that the massive drop reflected the market's lack of confidence in FB's valuation?

For example, search for "facebook earning estimates before ipo"

http://www.reuters.com/article/2012/05/22/us-facebook-foreca...

> In the run-up to Facebook's $16 billion IPO, Morgan Stanley, the lead underwriter on the deal, unexpectedly delivered some negative news to major clients: The bank's consumer Internet analyst, Scott Devitt, was reducing his revenue forecasts for the company.

Re: Facebook Not Feeling Friendly With Nasdaq

#29

Post by richardw »

FB needs to focus on other things, rather than keeping the "failure" association in the minds of investors any longer than it needs to be. Changing to NYSE or whatever would be a huge waste of time. Markets are forward-looking. The primary message from investors is "we don't think you can make us money", not "we think your first-day market action remains terribly important, and we'll buy every stock you can sell us if you change exchanges".

So fix the real problem. If you fulfil all the potential we keep hearing about, investors will find your listing.

Re: Facebook Not Feeling Friendly With Nasdaq

#30

Post by SoftwareMaven »

jinushaun wrote: post #5

Facebook needs to stop blaming everyone else for their failed IPO. NASDAQ didn't cause people to dump the stock days after the IPO. No, those were caused by stories of FB's overvaluation, GM pulling out and their inability to monetize mobile.

NASDAQ telling the market "you have until noon Monday to prove your losses" most definitely did cause people to dump stock in the first two days of trading. Confusion over whether trades were happening because NASDAQ wasn't confirming orders probably caused investors to be skittish, which could easily have had cascading negative effects.

It's hard to say if FB's stock was overpriced. The GM thing couldn't have helped. But to say NASDAQ had nothing to do with it is silly.

I look at FB's IPO and think of this[1]. Little (and not so little) permutations causing shockwaves through the system.

1. http://www.youtube.com/watch?v=Suugn-p5C1M&sns=em

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