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Facebook Bankers Secretly Cut FB Revenue Estimates In Middle Of IPO Roadshow

finance.yahoo.com

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Re: Facebook Bankers Secretly Cut FB Revenue Estimates In Middle Of IPO Roadshow

#41

Post by freehunter »

larrys wrote: post #37
freehunter wrote: post #20

Earlier quoted context omitted.

Says Reuters. Yahoo just reprints articles from the big news sources, such as Reuters and the AP. Word for word. http://www.reuters.com/article/2012/05/22/us-facebook-foreca...

"Yahoo just reprints articles from the big news sources" ?? It is an article by Henry Blodget. Love him or hate him his opinion about this certainly means something (regardless of his past).

Yes, it's an opinion article about a real news story from Reuters. It's not Yahoo making up the news.

Re: Facebook Bankers Secretly Cut FB Revenue Estimates In Middle Of IPO Roadshow

#42

Post by [deleted] »

tomgallard wrote: post #30
cube13 wrote: post #27

Earlier quoted context omitted.

>A research analyst at Morgan Stanley cut his revenue forecast on FB close to their IPO. Following that, FB amended their S-1 to lower revenue forecasts. The latter may have been informed by the former but it cannot be said that the former was influenced by the latter without more information. It was the opposite. Facebook filed the amended S-1, and Morgan Stanley, JPMorgan Chase, and Goldman Sachs changed their fore…

So Facebook expressed caution about revenue growth, and the banks downgraded their earnings forecast? I really don't see what the story is here! In fact the WSJ suggests that if they had released these revised earnings forecasts publicly, they'd have been breaking SEC regulations: Underwriters are barred by Securities and Exchange Commission rules from publicly issuing research on the IPOs they are involved in. But a…

[deleted]

Re: Facebook Bankers Secretly Cut FB Revenue Estimates In Middle Of IPO Roadshow

#43

Post by jpdoctor »

JumpCrisscross wrote: post #25

The original Reuters article does a better job explaining this than the link-bait title here: http://www.reuters.com/assets/print?aid=USBRE84L06920120522 FB amended their S-1 to lower revenue forecasts. Following that, a research analyst at Morgan Stanley cut his revenue forecast on FB close to their IPO. Nothing here should fire anyone up. Equity research must be conducted independently of the investment bankers' no…

> link-bait title

Oh FFS. Anything from Henry Blodget should immediately be ignored or delinked.

The man bilked all sorts of money from widows and orphans (in the form of pensions and mutual funds). Most normal people would want to make amends before showing their face in public, let alone the way he punches up stories.

I can't believe I fell for it too.

Edit: More sensibly written article in WSJ here - http://online.wsj.com/article/SB1000142405270230401940457741...

Re: Facebook Bankers Secretly Cut FB Revenue Estimates In Middle Of IPO Roadshow

#44

Post by lmm »

chernevik wrote: post #32

The bankers surely know how disastrous something like this would be. Facebook has been aggressively indifferent to this whole process, which involves a lot of complexity both in decision making and communication. "Don't make the analysts look bad" is an important rule, but one that's easy to miss unless you spend some time thinking through your communications with the market. If FB's initial analyst communications em…

Does facebook actually lose anything? It sounds like they walked away with the maximum amount of money possible; the bankers might be upset, and I can see that might make it harder for facebook to raise money in the future, but they're unlikely to need to for a while yet.

Re: Facebook Bankers Secretly Cut FB Revenue Estimates In Middle Of IPO Roadshow

#45

Post by GFischer »

jpdoctor wrote: post #43
JumpCrisscross wrote: post #25

The original Reuters article does a better job explaining this than the link-bait title here: http://www.reuters.com/assets/print?aid=USBRE84L06920120522 FB amended their S-1 to lower revenue forecasts. Following that, a research analyst at Morgan Stanley cut his revenue forecast on FB close to their IPO. Nothing here should fire anyone up. Equity research must be conducted independently of the investment bankers' no…

> link-bait title Oh FFS. Anything from Henry Blodget should immediately be ignored or delinked. The man bilked all sorts of money from widows and orphans (in the form of pensions and mutual funds). Most normal people would want to make amends before showing their face in public, let alone the way he punches up stories. I can't believe I fell for it too. Edit: More sensibly written article in WSJ here - http://online…

Another posted linked to Wikipedia

http://news.ycombinator.com/item?id=4008313

"Henry Blodget (born 1966) is an American former equity research analyst, currently banned from the securities industry"

en.wikipedia.org/wiki/Henry_Blodget

Re: Facebook Bankers Secretly Cut FB Revenue Estimates In Middle Of IPO Roadshow

#46

Post by antr »

guelo wrote: post #4

It is not possible to trust Wall Street, the whole thing is built on insider trading. They call customers that are not on the inside "dumb money" and unashamedly try to figure out how to take their money.

That is a pretty ignorant statement given that earning forecasts are always provided by the company and all Wall St. analysts do (independently from the underwriters) is check market assumptions, company's share of market, cost structure, etc.

Financial guidance, specially at the Net Income level, is ALWAYS the company's call. Who pushed for Facebook's $104bn valuation was current FB shareholders (Accel, DST, etc.), not the underwriters. Do not be that ignorant.

Re: Facebook Bankers Secretly Cut FB Revenue Estimates In Middle Of IPO Roadshow

#47

Post by horsehead »

I can't help but feel Facebook is on the way out. Probably not any time soon. But there is just a huge movement of people waiting for a good reason to leave. Perhaps the debacle that was the company's IPO will start the chain reaction that will end in Facebook going the way of MySpace, et al.

Re: Facebook Bankers Secretly Cut FB Revenue Estimates In Middle Of IPO Roadshow

#48

Post by chernevik »

lmm wrote: post #44
chernevik wrote: post #32

The bankers surely know how disastrous something like this would be. Facebook has been aggressively indifferent to this whole process, which involves a lot of complexity both in decision making and communication. "Don't make the analysts look bad" is an important rule, but one that's easy to miss unless you spend some time thinking through your communications with the market. If FB's initial analyst communications em…

Does facebook actually lose anything? It sounds like they walked away with the maximum amount of money possible; the bankers might be upset, and I can see that might make it harder for facebook to raise money in the future, but they're unlikely to need to for a while yet.

Well such a mistake would it hurt their ability to communicate with the analysts and the markets. They'd have less credibility and would have a harder time explaining anything tricky. They may hear less about what investors do and don't think and what drives the stock's movements.

Over time those communication gaps can lead to more volatility in the stock and perhaps lower levels. That may not matter to Facebook until it needs capital. But it will matter to early investors and employees holding stock they'd like to liquidate. Some of those players may have such returns they don't care, but not all of them are so fortunate and in general it's a missed maximization.

How important all of that is depends on what FB wants to do and be.

More broadly, public markets are an important constituency, if those investors don't trust you that's going to influence your reputation in the media and with the government.

Re: Facebook Bankers Secretly Cut FB Revenue Estimates In Middle Of IPO Roadshow

#49

Post by loverobots »

Sweet said analysts at firms that are not underwriting IPOs often change forecasts at such times. However, he said it is unusual for analysts at lead underwriters to make such changes so close to the IPO.

This makes zero sense. Aren't research analysts supposed to be separate from investment bankers? If so why is this odd. MS should not be able to tell its analysts to tone down a report or time it just because...

Re: Facebook Bankers Secretly Cut FB Revenue Estimates In Middle Of IPO Roadshow

#50

Post by lukejduncan »

GFischer wrote: post #45
jpdoctor wrote: post #43

Earlier quoted context omitted.

> link-bait title Oh FFS. Anything from Henry Blodget should immediately be ignored or delinked. The man bilked all sorts of money from widows and orphans (in the form of pensions and mutual funds). Most normal people would want to make amends before showing their face in public, let alone the way he punches up stories. I can't believe I fell for it too. Edit: More sensibly written article in WSJ here - http://online…

Another posted linked to Wikipedia http://news.ycombinator.com/item?id=4008313 "Henry Blodget (born 1966) is an American former equity research analyst, currently banned from the securities industry" en.wikipedia.org/wiki/Henry_Blodget

This gives some good color to who's running Business Insider.
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