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How did investors get "fleeced"? Nobody lied to them, they had all the info and just made the wrong choice. If next time investors decide to sit out Andrew Maso

How did investors get "fleeced"? Nobody lied to them, they had all the info and just made the wrong choice. If next time investors decide to sit out Andrew Mason next business just because they did poorly on the last one. I for one will be around to pick up the easy money. Also you're only talk the subset of investor that bought Facebook. There will be an equal number picking it up for cheap. The deal FB made was they tell everyone about the business, everyone else prices it. It's not Facebook's fault investor screwed up their end of the bargain.

spinchange 14y ago
>The deal FB made was they tell everyone about the business, everyone else prices it The underwriters priced it - at what CFO told them he wanted. That's not usually how these things work (imagine a bank ignoring a property appraisal in favor of what you tell them the property is worth), but the banks are shells of their former selves and needed this IPO and all the promise it held pretty desperately. They protected themselves with the greenshoe/naked short, and retail investors got left holding the bag. Maybe it's not "fleecing" per say, but it's not the kind of financial engineering an enterprise thinking about delivering long term returns to its investors would do.
- Evbn 14y ago
  Long term investors who bought at at the IPO don't even know what FB's price is now, because they aren't looking at short term returns.
  - spinchange 14y ago
    My point was that the deal was structured in a way that practically ensured the share price would fall. To think otherwise, for facebook management or investors is to believe in hubris. I think it's telling and kind of odd that in Cuban's own defense of the deal, he's a sucker for having bought at the IPO price. As an aside, high beta (volatility) stocks generally don't perform as well, long term, as do consistent growers with stable price action.

spinchange 14y ago

>The deal FB made was they tell everyone about the business, everyone else prices it The underwriters priced it - at what CFO told them he wanted. That's not usually how these things work (imagine a bank ignoring a property appraisal in favor of what you tell them the property is worth), but the banks are shells of their former selves and needed this IPO and all the promise it held pretty desperately. They protected themselves with the greenshoe/naked short, and retail investors got left holding the bag. Maybe it's not "fleecing" per say, but it's not the kind of financial engineering an enterprise thinking about delivering long term returns to its investors would do.

Evbn 14y ago
Long term investors who bought at at the IPO don't even know what FB's price is now, because they aren't looking at short term returns.
- spinchange 14y ago
  My point was that the deal was structured in a way that practically ensured the share price would fall. To think otherwise, for facebook management or investors is to believe in hubris. I think it's telling and kind of odd that in Cuban's own defense of the deal, he's a sucker for having bought at the IPO price. As an aside, high beta (volatility) stocks generally don't perform as well, long term, as do consistent growers with stable price action.