Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Facebook Not Feeling Friendly With Nasdaq

dealbook.nytimes.com

Post reply on HN
Print view View original

11–20 of 38 posts

Re: Facebook Not Feeling Friendly With Nasdaq

#11

Post by veyron »

wh-uws wrote: post #6
antidoh wrote: post #2

"For more than two decades, Silicon Valley has played a vital role in Nasdaq’s evolution,” said Joseph G. Christinat, a Nasdaq spokesman. “Nasdaq will always strive to be part of the Valley’s start-up ecosystem." Maybe the Valley needs to start its own exchange.

This is quite an interesting thought. How would this work? What would need to be done. Pros, cons?

The roadmap is fairly clear. You would first have to set up an ATS (which really doesnt require too much, but it does involve regulatory and paperwork hurdles)

The main advantage is that you can disrupt the exchange business. The disadvantages are many, including having to deal with SEC etc.

Re: Facebook Not Feeling Friendly With Nasdaq

#12

Post by JoshTriplett »

fragsworth wrote: post #8

One thing I don't understand is why the media portrays Facebook as "botching" its IPO. If anything, didn't the company make out with a better deal than their market value? How is this bad for Facebook? It's only bad for investors , if they invested in Facebook before its market value dropped, right? Also, I'm sure the investors and underwriters knew that there's a significant amount of uncertainty and risk when inves…

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.

Facebook had a relatively large number of private investors, enough to trigger additional restrictions regarding reporting and disclosure. Facebook hadn't intended to exceed that limit, but hit it anyway due in large part to new restrictions that prevented intermediaries such as brokers from letting many downstream customers count as 1, as well as people reselling their shares on secondary markets to extract value from them.

Those same private investors and brokers did quite a bit of trading when the IPO happened, much of it not to the benefit of Facebook.

Re: Facebook Not Feeling Friendly With Nasdaq

#13

Post by veyron »

JoshTriplett wrote: post #12
fragsworth wrote: post #8

One thing I don't understand is why the media portrays Facebook as "botching" its IPO. If anything, didn't the company make out with a better deal than their market value? How is this bad for Facebook? It's only bad for investors , if they invested in Facebook before its market value dropped, right? Also, I'm sure the investors and underwriters knew that there's a significant amount of uncertainty and risk when inves…

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 reports. These reports are available to the public through the SEC's EDGAR database.

Re: Facebook Not Feeling Friendly With Nasdaq

#14

Post by jessedhillon »

veyron wrote: post #10

Everyone is blaming NASDAQ for issues that are not inherently NASDAQ's fault. The IPO "flopped" not because of the exchange but because demand wasn't there. Switching to NYSE won't magically change the price (and I'm pretty sure the price would have fell on the opening day if they listed on NYSE).

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

Re: Facebook Not Feeling Friendly With Nasdaq

#15

Post by pkteison »

fragsworth wrote: post #8

One thing I don't understand is why the media portrays Facebook as "botching" its IPO. If anything, didn't the company make out with a better deal than their market value? How is this bad for Facebook? It's only bad for investors , if they invested in Facebook before its market value dropped, right? Also, I'm sure the investors and underwriters knew that there's a significant amount of uncertainty and risk when inves…

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/2012-05-20/nasdaq-ceo-says-poo...

Re: Facebook Not Feeling Friendly With Nasdaq

#16

Post by pg »

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…

Please stop shouting.

Re: Facebook Not Feeling Friendly With Nasdaq

#17

Post by veyron »

jessedhillon wrote: post #14
veyron wrote: post #10

Everyone is blaming NASDAQ for issues that are not inherently NASDAQ's fault. The IPO "flopped" not because of the exchange but because demand wasn't there. Switching to NYSE won't magically change the price (and I'm pretty sure the price would have fell on the opening day if they listed on NYSE).

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 post-mortem analyses. Do a quick google search.

"Switching to NYSE won't magically change the price (and I'm pretty sure the price would have fell on the opening day if they listed on NYSE)."

For the venue to have changed the price action, the initial demand would have had to been restrained by the technical difficulties. However, given that customers at various retail brokerage houses were able to get shares in the hours leading up to the IPO, I would chalk that up to a dearth in demand.

Re: Facebook Not Feeling Friendly With Nasdaq

#18

Post by JoshTriplett »

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…

Thanks for the correction. Various news sources have made the same mistake, and I must have picked it up from one of those.

Re: Facebook Not Feeling Friendly With Nasdaq

#19

Post by veyron »

pg wrote: post #16
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…

Please stop shouting.

Please accept my apology for shouting.

Many threads regarding the Facebook IPO are littered with people repeating the same idea that Facebook was forced to go public, based on a faulty understanding of SEC regulations. And no one, especially late stage YC companies, should feel pressured to IPO.

Re: Facebook Not Feeling Friendly With Nasdaq

#20

Post by powertower »

pkteison wrote: post #15
fragsworth wrote: post #8

One thing I don't understand is why the media portrays Facebook as "botching" its IPO. If anything, didn't the company make out with a better deal than their market value? How is this bad for Facebook? It's only bad for investors , if they invested in Facebook before its market value dropped, right? Also, I'm sure the investors and underwriters knew that there's a significant amount of uncertainty and risk when inves…

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).
Post reply on HN