Insiders were selling their Facebook shares pre-IPO.
Morgan Stanley bought 63M Facebook shares ($2.3B) to create a floor around $38
51–60 of 64 posts
Re: Morgan Stanley bought 63M Facebook shares ($2.3B) to create a floor around $38
#52I suspect they will keep this up next week. They will also work out a deal with facebook for facebook to buyback lots of the shares that Morgan Stanley is buying. That way the stock price can go up while the market cap is going down.
Re: Morgan Stanley bought 63M Facebook shares ($2.3B) to create a floor around $38
#53From the article: "The firm did this by tapping into a 63 million share over-allotment option, or greenshoe, according to sources familiar with the deal."
The title of your post is inaccurate. No one knows for sure how many shares MS bought during the initial day of trading.
For a full breakdown of the first day of trading, check out Zerohedge's analysis:
http://www.zerohedge.com/news/facebook-complete-forensic-pos...
Re: Morgan Stanley bought 63M Facebook shares ($2.3B) to create a floor around $38
#54Earlier quoted context omitted.
Ok and this is what I don't get. Usually companies that are traded publicly have responsibilities toward stockholders to do anything in the power (reasonably) for the stock to be going up. That the simplicity of a stock market - no investor is willing to lock its money knowing a company is not willing to grow. Now, if you have one guy (that to average person is called a "hacker in the hoodie"), how do you trust a sto…
The bus factor is priced in, as is the assumption that Facebook will dramatically increase its revenue in the long run. If Facebook would not grow anymore, the stock would instantly collapse.
netrus, I don't think it works like that. You just described a crystal ball. You sure they know everything that is in this stock? Would there be a justify reason behind something called "Stock exchange" if everyone would know everything in the future?
And what do you mean by instantly? Like the first day or first year, or what? because as far as I remember everywhere I talked with bankers, everyone from teen that just turned 18 to a 95 years old grandpa withdrawing last savings were going to buy Facebook stock. But this is not what Friday has showed to us. 2 things; either: a) entire world change its mind overnight (I spoke with banker as late as last Thursday), or b) there was so much selling happening, that if the world was buying, it wasn't just enough to build demand and push the stock up. I go with gate #2, considering how much underwriters were willing to buildup on $38. A $300,000,000 worth dam!! I guarantee you, plenty of big fish is shitting in pants right now. To many of them this weekend, before Monday opening, is not a chilling out and relaxing time. I think by next Friday you will see some spectacular action on this stock.
Further, I think that Zynga, Groupon, Zillow, Linkedin, ZipCar, Pandora and others -- they are all assuming dramatically increase in revenue. But yet they are all below (some significant like Groupon or Zynga) their IPO price.
Re: Morgan Stanley bought 63M Facebook shares ($2.3B) to create a floor around $38
#55Earlier quoted context omitted.
To me it all seems like part of the same problem: some banker pulls a number out of his ass as "the price". There should be an auction or market of some other kind to determine the price, because... well, markets are a pretty good mechanism for determining prices, usually much better than any one individual or small group.
that is what happens during the roadshow, which led to the price going up in the last few days and more shares being issues because of demand funny that Google tried the auction, ended up getting wall st against them and colluding to lower the price. Facebook co-opts all the big name banks as underwriters and gets a near-perfect opening price.
"gets a near-perfect opening price."
If Morgan-Stanley was propping the stock up, then that's strong evidence it wasn't a near-perfect opening price, but that it was too high.
Re: Morgan Stanley bought 63M Facebook shares ($2.3B) to create a floor around $38
#56Earlier quoted context omitted.
that is what happens during the roadshow, which led to the price going up in the last few days and more shares being issues because of demand funny that Google tried the auction, ended up getting wall st against them and colluding to lower the price. Facebook co-opts all the big name banks as underwriters and gets a near-perfect opening price.
"gets a near-perfect opening price." If Morgan-Stanley was propping the stock up, then that's strong evidence it wasn't a near-perfect opening price, but that it was too high.
Which makes it near-perfect for Facebook (more capital from the sale), but less-so for shareholders, particularly those looking to make a buck on a quick flip.
Re: Morgan Stanley bought 63M Facebook shares ($2.3B) to create a floor around $38
#57Earlier quoted context omitted.
Can employees still sell their shares on secondmarket now that FB is public?
They might be able to, but there is no real reason to buy on a second market now, so the market would be illiquid. If the employee would want to sell now for fear of a devaluation during the lock out period they could buy put options at the current valuation, haven't checked the price, but those options can't be too expensive right now.
Employees are almost certainly restricted to trading windows independent of any lockout provision. Given the lockout, it's unlikely that there is currently an open trading window. Any insider trading options outside of that window is likely to run afoul of the SEC.
Re: Morgan Stanley bought 63M Facebook shares ($2.3B) to create a floor around $38
#58From the article: "The firm did this by tapping into a 63 million share over-allotment option, or greenshoe, according to sources familiar with the deal." The title of your post is inaccurate. No one knows for sure how many shares MS bought during the initial day of trading. For a full breakdown of the first day of trading, check out Zerohedge's analysis: http://www.zerohedge.com/news/facebook-complete-forensic-pos..…
Very interesting. I'd love to know how to interpret this: http://www.zerohedge.com/sites/default/files/images/user5/im...
Re: Morgan Stanley bought 63M Facebook shares ($2.3B) to create a floor around $38
#59A lot of misunderstanding about the greenshoe... It's really simple: The IPO sells X+Y shares, where X is the big IPO number of shares and Y is the "over-allotment". If the stock trades above the IPO price, the money from selling Y shares is given to the IPO company along with the rest of the money from selling X shares. If the stock drops below the IPO price, the underwriters start buying back (up to Y shares * IPOp…
"It is one of the few times outright price manipulation is allowed (which should be a completely different discussion"
I'm curious to know what arguments are in favour of it. If they're incorrectly pricing the IPO, surely they should suffer for it and adjust their pricing models and strategies rather than be allowed to manipulate their way around what's pretty much their own mistake?
I don't know much about how companies go public but it sounds like a good portion of the stock is issued to "investors" at or below the IPO price who then immediately go on to sell that stock to the public when trading is opened? So the downside of pricing the IPO too low is the company won't receive as much for the shares as they could have. Presumably just issuing the shares directly to the public during the IPO seems like the way to capture the best price? Is the problem that the exchange doesn't allow for the issuing of shares, only the trading of shares, so somebody needs to own them first? I'm sure there's a good reason why but what is it?
Re: Morgan Stanley bought 63M Facebook shares ($2.3B) to create a floor around $38
#60As I said a month ago. May 17 is a terrible time to IPO. Facebook will be fighting against a falling stock market. Operation twist is about to end, and there are a lot of believers in "Sell in May and go away."
I've heard there are also a lot of believers in "Buy in May, Hip Hip Hooray!". I think both of our believer sayings have about the same amount of credibility...