Facebook IPO?

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dingalls's picture
dingalls
Status: Bronze Member (Offline)
Joined: Aug 21 2009
Posts: 28
Facebook IPO?

What is the word on the Facebook IPO as a short-term, day-trader style investment? Sure thing or guaranteed flop? Any good articles come to mind?

docmims's picture
docmims
Status: Platinum Member (Offline)
Joined: Jun 17 2009
Posts: 644
i'ts a moneymaker for

i'ts a moneymaker for facebook. founders.  not for investors. my humble opinion

Dogs_In_A_Pile's picture
Dogs_In_A_Pile
Status: Martenson Brigade Member (Offline)
Joined: Jan 4 2009
Posts: 2606
Trade the movement....

docmims is right.

IPOs are rarely good investment opportunities but you will probably have numerous trading opportunities on the accompanying price movement.

Day traders are not investors.  Or even good traders for that matter.

jumblies's picture
jumblies
Status: Silver Member (Offline)
Joined: Jun 13 2010
Posts: 244
http://www.bloomberg.com/news

http://www.bloomberg.com/news/2012-05-24/facebook-investor-spending-month-s-salary-exposes-hype.html

“It’s disheartening to know that things get over-hyped,” Cefalu, a 34-year-old data-systems manager who spent about $4,000 on the stock, said in an interview. “That’s about a 12th of my annual income -- so a month’s salary. I’m trying to do an on-my-own retirement kind of thing.”

When I read things like this from supposedly intelligent people, especially those in the tech industry, I'm compeltely stumped as to how they didn't see this IPO for what it was - another fleecing of the people by Wall St.

And then I read articles like this from the likes of Bloomberg (though they are the norm rather than the exception)

The outcome: After Facebook and its underwriters misjudged demand in pricing the IPO and glitches on the Nasdaq hampered trading on the first day, the world’s largest social-network website lost 18 percent in three days. The shares are still about 13 percent under their $38 IPO price after paring some losses.

Outright bloody fraud, more like. And as for glitches, that's rubbish too. Everyone was in their place, primed and ready for what they knew was going to happen. Nasdaq are fully aware of the volume of network traffic that this was going to generate. It's not as if they don't have plenty of experience of what happens when algo's go wrong (or right...hard to say).

Michael McClafferty, a freshman finance major at Michigan State University, saw his “first big investment” turn into a $3,000 loss when he sold the shares at $35.

[..]

The 19 year-old student estimates he spent $8,000 more than he wanted to while repeating orders that wouldn’t go through on the first day, and failing to cancel them because of the technical problems.

This doesn't bode well for this man's career if he's studying the world of finance and can't spot the biggest fleecing in history. And how come he's got all this money to gamble on the stock market?

Some investors managed to take advantage of the initial gain. James DiMaggio, a 29-year-old product line sales manager at Ametek Inc. in Morton, Pennsylvania, said he bought 200 shares at $38, sold half for $40.98 and made about $280.

“The other half is now tanking,” said DiMaggio, who estimates his losses so far at $320. “It was really exciting in the beginning. I don’t gamble, and this is obviously a gamble.”

He doesn't gamble. And yet he's playing on the stock market. WIth all these bad times around, I wonder why people think they have all this money to gamble on the market.

But aside from all that, what never ceases to amaze me is looking at the data that Nanex produces. The following is from a Zerohedge article and this is just one of the graphs. This is 1 millisecond (1/1000 of a second) and just look at the number and volume of trades over that time.

So the fleecing continues. Despite all the bad news, job losses, mortgage woes, house repo's, student debt and rising prices etc, people still seem to find the money to gamble in a rigged market.

Still, at least we get pretty chart pr0n.

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