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

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

#81

Post by hef19898 »

jlarocco wrote: post #68
mbreese wrote: post #58

Earlier quoted context omitted.

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.

My opinion is that if people at stock exchanges thought things over for two days a lot of things would be different...

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

#82

Post by JDavo »

saulrh wrote: post #59
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…

You're missing a point there. The information may be mostly white noise, but with that much data, even filtered by laws and ethics, statistics are powerful . You are not the customer; neither are the developers. It's Target. http://www.forbes.com/sites/kashmirhill/2012/02/16/how-targe...

I have no problem visualizing how Target is able to predict future purchases based on what items I've already bought or what items I'm browsing. I have trouble visualizing how anyone can predict future purchases based on me liking a picture of a cat or browsing through friends vacation photos. Unless they're planning on selling me cat vacations...

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

#83

Post by shock-value »

sfall wrote: post #79
shock-value wrote: post #71

Earlier quoted context omitted.

I think you overstate the amount of useful data Facebook has on people. Just to take your example: Facebook may very well know which state I live in, but they definitely don't know whether I'm left handed, for example. On the other hand, Google might very well know this, if, say, I have searched for left handed golf clubs. Amazon would also know this, if I have bought said clubs through them. Google and Amazon almost…

ok facebook may not know if your left handed, unless your in a left handed appreciation group, but think about all the information facebook does collect on you. where you or others check in, likes, people you chat with, what you chat about, who tags you in posts and photos and who your with, not to mention all the tracking facebook does with other sites

Well, it remains to be seen whether that data can actually generate revenue. I personally don't think it has much potential, at least not compared to the extremely specific data Google has on everyone, or the purchasing data that Amazon possesses.

Also, I just don't think people use Facebook the way you describe. Most people I know don't "check in" wherever they go, nor do they "like" different brands (except for ones that make them do so in order to be eligible for a contest or something sketchy like that--I've definitely seen that before). But people do search on Google for anything and everything, including purchasing decisions. And of course people do make real purchases on Amazon.

The widgets that Facebook litters over the web which it can use to track user's browsing habits may be the wild card here, but I'm still skeptical that this has that much value compared to Google's search data. Plus those widgets seem to be mostly limited to news sites anyway.

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

#84

Post by brazzy »

hef19898 wrote: post #80
dos1 wrote: post #7

I have a hard time drumming up sympathy for these guys. They're mad because they couldn't make a quick buck. Isn't a hedge fund just gambling? It's high time Wall St. learns that it's never a good idea to put more in the pot than you can lose. The part that is most striking to me is that share price and a company's intrinsic value are seemingly in different galaxies. This guy is talking about decisions based on hype…

Yeah, these guys are funny. One day they agressivly take over companies. And the other day, as it happened with VW stock in Germany, the sue others when their gambles don't work. What I remeber from the VW stock story happened back then was the following. Porsche tried to take over VW, so they bought every stock they could. Hedge funds bet on falling values and sold VW stock short. Since Porsche continued buying, sto…

VM was a very special case, since most free floating stock is non-voting (I think this has since changed); at that time only about 6% of the voting stock was free floating.

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

#85

Post by jyrkesh »

veyron wrote: post #12
dos1 wrote: post #7

I have a hard time drumming up sympathy for these guys. They're mad because they couldn't make a quick buck. Isn't a hedge fund just gambling? It's high time Wall St. learns that it's never a good idea to put more in the pot than you can lose. The part that is most striking to me is that share price and a company's intrinsic value are seemingly in different galaxies. This guy is talking about decisions based on hype…

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…

Except that it's their rules that they're following, and with HFT those rules are generally rigged to help out the big guys. In fact, I'd be willing to bet that the system wouldn't have actually crashed if there weren't a bunch of Morgan Stanleys and the like trying to make a quick buck on day one.

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

#86

Post by bbrtyth »

veyron wrote: post #16
zackzackzack wrote: post #10

Earlier quoted context omitted.

If they signed a legally binding agreement, then I imagine NASDAQ breaking would be part of the game.

The contracts absolve NASDAQ of liability in calamities of this nature (my business was almost destroyed -- had to take a 250K loss -- thanks to an order entry server failure), but it doesn't make you feel better. Having had something similar happen to me, I know how much it sucks. You accept its a possibility, but don't really believe it will happen until it does.

But then why do exchanges feel free to reverse trades after the flash crash, but not after something like this flash freeze? From a non-trader's perspective it's as if they do whatever they like.

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

#87

Post by pbhjpbhj »

joezydeco wrote: post #65
minimax wrote: post #60

Earlier quoted context omitted.

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

Looks crooked as anything.

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

#88

Post by sneak »

jlarocco wrote: post #68
mbreese wrote: post #58

Earlier quoted context omitted.

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.

> 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?

You are confusing "should" with "is". Don't do that.

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

#89

Post by KirkWylie »

nl wrote: post #44

I love this story on so many levels. Firstly there is the irony of a "blue collar hedge fund manager" There's the fact the lack of an IPO bump means Facebook equity holders are the people who made money out of it, instead of the investment banks buying at the opening and hoping to sell at the bump price. Then there's the whole "HN thinks Facebook is worthless and has the satisfaction of seeing the stock drop on the o…

As someone who's worked in and with a lot of Hedge Funds, he's not a Hedge Fund Manager: he's a trader.

What that means in general is that while he's going to be very well paid w.r.t. the rest of society, he's not the guy actually doing the full hedge fund portfolio management, he's a guy executing trades on behalf of that portfolio manager.

The PM is the guy who makes the massive, massive payout, not the trader operating on his instructions.

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

#90

Post by luriel »

bbrtyth wrote: post #86
veyron wrote: post #16

Earlier quoted context omitted.

The contracts absolve NASDAQ of liability in calamities of this nature (my business was almost destroyed -- had to take a 250K loss -- thanks to an order entry server failure), but it doesn't make you feel better. Having had something similar happen to me, I know how much it sucks. You accept its a possibility, but don't really believe it will happen until it does.

But then why do exchanges feel free to reverse trades after the flash crash, but not after something like this flash freeze? From a non-trader's perspective it's as if they do whatever they like.

It might look like they do whatever they like because pretty much they do whatever they like.
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