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On the one hand, this indicates that the underwriters did a good job of maximizing FB private shareholder value on the IPO. On the other, the shape of the dail
by loumf 14y ago
On the one hand, this indicates that the underwriters did a good job of maximizing FB private shareholder value on the IPO.
On the other, the shape of the daily curve looks like it was supported at that level artificially.
Even if not, it doesn't look like there's a lot of market confidence for it at this level.
- earl 14y agohere's the pricing chart for today [1]. What makes you think it was supported -- the flat line beginning at 334 pm? [1] http://finance.yahoo.com/echarts?s=FB+Interactive#symbol=fb;range=1d;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined http://finance.yahoo.com/echarts?s=FB+Interactive#symbol=fb;...;
- loumf 14y agoYes, that and the rally at almost exactly that level a little before 12pm
- kami8845 14y agoThere's also similar things going on around 40. Any chance they tried to hold the round 10?
- maayank 14y agoIt was supported: http://www.businessinsider.com/chart-of-the-day-why-facebook-never-fell-below-38-per-share-2012-5 http://www.businessinsider.com/chart-of-the-day-why-facebook... A possible reason why it reached 38 in the first place: http://www.businessinsider.com/why-facebooks-ipo-pop-fizzled-nasdaq-isnt-telling-desks-if-they-got-their-stock-2012-5 http://www.businessinsider.com/why-facebooks-ipo-pop-fizzled...
- sks 14y agoWell the price did come very close to $38 several times (twice before 12:00 and then during the flat part at 3:34 that you mentioned) but the price never crossed below $38. This does show a lot of resistance/support at $38
- encoderer 14y agoYes, of course, because the underwriters in an IPO act as market-makers at the IPO share price. That's their function in exchange for making an obscene profit taking a company public.
- nextparadigms 14y agoI watched it go to down to 38.00, and then went up again 0.01, 0.02, etc, slowly. I don't think it dropped at all under 38.00, and it was most likely manipulated.
- deleted 14y ago[deleted]
- uptown 14y agoIt was unquestionably held up by underwriters ... unlikely to continue into next week.
- gojomo 14y agoMore evidence of artificial support, a tweet and screen capture from Paul Kedrosky: http://lockerz.com/s/209964861 http://lockerz.com/s/209964861 It's easy to overlook the graphic; it's the thin black bar with faint text. It shows: Bid (size): 38.00 (x9999900) Ask (size): 38.01 (x146300) ...and the tweet referencing it was about 20mins before the close. The earlier tweet was: @pkedrosky: Watching certain underwriters try to keep certain IPOs above their issue price reminds me of playing Missile Commander, at scale. Still, this isn't necessarily a negative for Facebook. They optimized their take, and Zuckerberg won't be needing the market's approval or capital again for a while.
- tazzy531 14y agoWhat's going to be interesting is how long they can hold this support. Banks can't take on too much risk on their books.. especially in the post Dodd-Franks world.
- state_machine 14y agoThis is the greenshoe option at work: When the price is determined, the shares are ready to publicly trade. The underwriter has to ensure that these shares do not trade below the offering price. If the underwriter finds there is a possibility of the shares trading below the offering price, they can exercise the greenshoe option. http://www.investopedia.com/articles/optioninvestor/08/greenshoe-option-ipo.asp#ixzz1vFsh1DfT http://www.investopedia.com/articles/optioninvestor/08/green...
- AndyIngram 14y agoNo its not. Over allotments are to stabilize the lack of sellers above the offering price and to raise additional capital for the issuer. It could be a reason for the price returning to $38 but most likely that was not why either. The buys at $38 can be explained by other factors like orders from people or funds who did not get all or any of their requested allotments and had resting orders at 38. Overall the markets are skittish and the price range is high based on current earnings but there is so much potential future earnings, I think we will see much higher prices if not right away some time in 2013.
- squeee 14y agoSo... get short on FB?
- AndyIngram 14y agoThat's your choice.
- gdubs 14y agoUgh. What is it about finance that I find so hard to grok... So, essentially they're able to offer more shares than they originally agreed to, correct? Where do those extra shares come from, and how exactly does that help keep the price above water?
- hiddenstage 14y agoIt beat the market. Not saying it will over the short/long term, but it went up on a day the majority of the market went down.
- Cyndre 14y agoWhere do you think the billions used to buy facebook stock came from?
- mratzloff 14y ago> On the other, the shape of the daily curve looks like it was supported at that level artificially. Facebook's too big to fail!
- cookiecaper 14y agoThe prospect of that reality is frightening. Facebook is so large now that if it went away the amount of civil discontent would be a point of concern for politicians (primarily if Facebook's disappearance gets pinned on them).
- shangrila 14y agoThe flipside of that of course is that they can pass whatever draconian regulations they want in regards to the internet, so long as Facebook gets a free pass and is allowed to keep chugging along. Surprised they didn't do that already for things like SOPA.
- cookiecaper 14y agoFacebook would in practice get a free pass on things like SOPA. AFAIK SOPA left discretion up to whatever agency would have been charged with enforcement (likely ICE or SS), so reports asking for the removal of Facebook would, of course, never be allowed, but reports on any/all of FB's competitors would go through. That is one of the reasons lobbying is such an important game for conglomerates. Once you're on top, regulation is your friend; it's much cheaper to hire paper-pushers to fill out forms and submit them to the feds than it is to actively respond to and dismantle competitors. If only MySpace had gotten something like this in place a little sooner, FB would have been destroyed and MS would still be on top.
- joshz 14y agoThey did. http://www.bloomberg.com/news/2012-05-18/facebook-underwriters-said-to-support-stock-at-near-38-a-share.html http://www.bloomberg.com/news/2012-05-18/facebook-underwrite...