ipo

Facebook's uber-rich insiders aren't likely to win much sympathy. But the company's thud of an IPO is likely to shave hundreds of millions in profits for a select bunch who just a few days ago counted on a magnificent payday.

As a result of the swoon in Facebook's stock, early investor Sean Parker is likely to lose out on $380 million in cash he had expected; Facebook co-founder Dustin Moskowitz: $285 million.

Let's hope they haven't spent it already.

At issue is what's called the "over allotment" of shares -- known … Read more

A Maryland investor sued the Nasdaq stock exchange over its mishandling of the Facebook IPO on May 18, claiming that investors lost money because the exchange failed to process buy, sell and cancellation orders in a timely fashion.

The investor, Phillip Goldberg, filed his complaint in Manhattan federal court and is seeking class-action status, Bloomberg reported.

Goldberg's complaint alleges that Nasdaq was negligent because it delayed trades and failed to cancel customer orders as requested. The exchange has apparently blamed faulty software. Nasdaq also faces an SEC review over trading in Facebook shares.

Even on Internet time, that's pretty fast.

Truly, the whine-fest accompanying Facebook's first few steps as a public company has been remarkable, what with the screeching about a botched IPO now as loud as the hype that surrounded the run-up leading to last Friday's big event. It's also fed a growing backlash that has left investors and analysts howling about the $105 billion market capitalization that Wall Street gave the company.

And though this novella is far from played out, you know the rest of the story: as … Read more

The chairman of the Financial Industry Regulatory Authority told Reuters today that regulators plan to review the allegations that Facebook's own underwriter shared negative news with big investors in the run-up to the Facebook IPO last week. The SEC is also reportedly going to investigate.

News of a possible probe follows a Reuters report last night that said Morgan Stanley and Goldman Sachs each told major clients that it was reducing its revenue forecast for Facebook.

"The allegations, if true, are a matter of regulatory concern" to the Financial Industry Regulatory Authority and to the SEC, FINRA … Read more

Facebook's stock hit a new low as reality sinks in for the social-networking titan.

Shares opened down 6.6 percent to $31.78 today. It then slipped further to $31.59.

After going public in one of the largest initial public offerings ever, Facebook's stock has seen nothing but trouble. After facing glitches in its first day of trading that halted any potential momentum it had going, shares fell 11 percent on its second day of trading yesterday.

The sentiment this morning wasn't good; shares had already indicated lower before the market opened.

Despite Facebook's massive … Read more

While Facebook's underwriters have been credited with keeping the stock afloat during its first day of trading, a new report suggests that the action of one the company's bankers may have helped sink the social network's much-anticipated offering well before its first trade.

In the days before Facebook's IPO, the lead underwriter for the deal told major clients it was reducing its revenue forecast for the company, according to a Reuters report.

Morgan Stanley's revised forecast so close to the monster IPO came as a huge shock to some, likely contributing to the lackluster performance … Read more

On "Meet the Press" this weekend, Jim Cramer called Facebook's initial public offering a total fiasco and "one of the worst handled things I've ever seen." That's because the stock climbed only 23 cents, or just over 0.6 percent. Many said Facebook fizzled.

A surging stock on the first day of trading is certainly a success for those insiders with relationships to the investment bankers who can make an instant bundle. And the investment banker also does better under that scenario.

But my definition of a successful launch of a new publicly … Read more

Updated at 1:21 p.m. PT

Well, the euphoria over Facebook didn't last long, did it?

I would guess that the enthusiasm over Facebook's stock lasted a few minutes into its first-day trading session, peaking with a rare $45 order that many believe was more of a fluke than a true indication of demand.

Since then, reality has taken hold. The stock opened with a thud, and is down more than 12 percent to $33.56, a sobering reality for anyone caught with Facebook shares on Friday, when the stock closed just above its offering price of $… Read more

If Morgan Stanley hadn't propped up Facebook's stock on Friday, it would have easily closed below its $38 IPO price.

If it couldn't get more momentum on the day it launched, what is it going to do now that the bloom is so suddenly off the rose?

The market is clearly not buying the $100 billion valuation Mr. Zuckerberg and company tried to pawn off on the public. At midday Monday it is already down 11 percent to $34. So how low? $19? $20?

Expect Morgan Stanley to do more propping in the week ahead.

Read more … Read more