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Why Shouldn't Practitioners Of Muppetology Get Swallowed In A Facebook IPO Class Action Suit?

Reggie Middleton's picture




 

 

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Reuters reports on Facebook:

"Morgan Stanley unexpectedly delivered some negative news to major clients: The bank's consumer Internet analyst, Scott Devitt, was reducing his revenue forecasts for the company. The sudden caution very close to the huge initial public offering, and while an investor roadshow was underway, was a big shock to some, said two investors who were advised of the revised forecast."

I query, exactly why shouldn't there be class action lawsuits? Seriously! I run a very small operation with a budget smaller than Morgan Stanley’s or Goldman's postage expense. Despite such I have been able to clearly and granularly articulate that Facebook was grossly overvalued a year ago while it was a private company being hawked by Goldman Sachs as a private placement - Facebook Registers The WHOLE WORLD! Or At Least They Would Have To In Order To Justify Goldman’s Pricing: Here’s What $2 Billion Or So Worth Of Goldman HNW Clients Probably Wish They Read This Time Last Week!

As the IPO approached and more specific info available, the overvaluation simply became stronger and more apparent; reference Shorting Federal Facebook Notes Are Not Allowed Today. So is that I and my team are really that smart (and handsome) or are there other factors at play? A little more than a year ago Bloomberg created a list of who they considered the top performing analysts and brokers from the sell side. I was literally offended by how bad the performance actually was, especially when compared to an independent investor/analyst, reference Did Reggie Middleton, a Blogger at BoomBustBlog, Best Wall Street’s Best of the Best?

Again, miraculously, Reggie Middleton and BoomBustBlog somehow managed to out run ALL of the big boys. As much as I would love to say  I’m simply better than ALL of those big boys, the reality of the matter is that I’m simply significantly less conflicted. The big banks have the resources and intellectual capital to run circles around me if they really wanted to. The problem is that really don’t want to. It is much more profitable to take agency commissions and principal transaction profits (as ZH often identifies as front running) from your clients than it is to wisely counsel them in investments. This is particularly true if they will keep coming back to you after getting raped, again and again.

I have written extensively on this, forming a quasi-scientific discipline of study, colloquially known as Muppetology:-) See the links below for more on this new branch of psychology/social science as it applies to finance and investments...

Goldman Sachs Executive Director Corroborates Reggie Middleton's Stance: Business Model Designed To Walk Over Clients

For Those That Want To Take A Peek Inside the Professional BoomBustBlog Paywall, Here's All of My Groupon Research - MUPPETS!!!

Apple's iPad Is Losing Market Share And Profit Margin As Apple Hits All Time High 

The Conundrum of Commercial Real Estate Stocks: In a CRE "Near Depression", Why Are REIT Shares Still So High and Which Ones to Short?

Wall Street Real Estate Funds Lose Between 61% to 98% for Their Investors as They Rake in Fees!

Wall Street is Back to Paying Big Bonuses. Are You Sharing in this New Found Prosperity?

Reggie Middleton vs Goldman Sachs, part 1For Those Who Chose Not To Heed My Warning About Buying Products From Name Brand Wall Street Banks

Blog vs. Broker, whom do you trust!

Reggie Middleton Personally Congratulates Goldman, but Questions How Much More Can Be Pulled Off

 

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Tue, 05/22/2012 - 20:26 | 2453440 Jason Bourne
Jason Bourne's picture

Hey how about this? I don't want a FB Lawsuit. I don't want GS or other prick bankers to be assesed a fine. I want ALL the fucking money back. ALL of it. The lying fuckers and pumpers get NOTHING.

Some part of enforcement claws it all back even their own fucking position. Maybe on top of that we can establish a fucking fine or penalty too.

When is this fucking bullshit going to be stopped? Note my specific use of words. Going to "be" stopped? People from the outside in some form that works, legal, regulation, criminal, govermental or other means have to put a stop to it. Its never going to stop on its own or because the bankers are fucking parasites that do not give a fuck about anybody but themselves.

Why is it that most normal investors can see what a shitty deal FB is but the underwriters can still get away with it?

I know the above is never going to happen but I just had to write it anyway.

FUCK.

Disclosure: Like you give a shit, and you don't give a fuck who I am, I'm not in any stock. Not that some aren't excellent plays. FB is not one of them.

Tue, 05/22/2012 - 19:46 | 2453317 Shizzmoney
Shizzmoney's picture

Cramer: "Buy FB!"

Tue, 05/22/2012 - 15:05 | 2452069 Golden monkey
Golden monkey's picture

That IPO looks to me like a big con though.

Tell me Reggie, I have a strange feeling that this time is different, and that someone had been screwed right away. Ever smell the dead shark on tha beach?

Quick con : the way to go. Why waste your time?

Tue, 05/22/2012 - 17:17 | 2452845 walküre
walküre's picture

Upcoming filings (form 5) will be interesting. How much stock did insiders liquidate in first day of trading?

Campaign was not the issue. Buying interest was certainly huge. Naked shorts possibly. Could think of a number of IBs that had their beef with MS and used this opportunity as payback. Will probably all lead to offshore accounts anyway.

NASDAQ's reputation has been shot as well as the overall impression of the Street. Next thing you'll hear it was financial terrorism by Al Kaida's trading desk deep down in the caves of the Hindukush.

Funny stuff going on.

Wed, 05/23/2012 - 12:55 | 2455433 StychoKiller
StychoKiller's picture

That Trillion $ of minerals lying around in Afghanistan includes fiber-optic cable, apparently! :>D

Tue, 05/22/2012 - 15:02 | 2452044 Arnold Ziffel
Arnold Ziffel's picture

retial KY Lube sales soaring I read.

Tue, 05/22/2012 - 14:40 | 2451902 ebworthen
ebworthen's picture

So the insiders sold at $41 to the retail crowd who are now looking at $32 and change?  Typical.  I'm sure the SEC and the CFTC will have their "top people" working on this one.  Top people, the same people going after Corzine.

Tue, 05/22/2012 - 13:41 | 2451637 ExpendableOne
ExpendableOne's picture

I believe the combination of Facebook + cheap google phones + dim witted users == a big headache for many entities.  Verizon, AT&T etal are watching sms traffic flip over to Facebook status while Facebook struggles with how to slip a few adds into the data stream.  It's a classic example of disruptive technology.

Now, who is benefitting from all this?  I'd say it's any entity with a big fat bundle of fiber connected onto Facebooks backbone network.  From there, you can monitor the sheeple in real time.  Insert a meme onto the "internets" and watch it propogate from phone to phone.  Adjust, repeat, measure, repeat.  Can you say grooming the sheeple?

 

Tue, 05/22/2012 - 12:52 | 2451463 El Oregonian
El Oregonian's picture

But Reggie, they want the sheeple to eat Facebook turds. They say that the gooey middle is minerally beneficial....

Tue, 05/22/2012 - 12:41 | 2451420 Mike Cowan
Mike Cowan's picture

Would Geraldine Weiss have bought Facebook stock? I am sorry, but I just had to say that. I am a disciple of Geraldine Weiss. She was such a great investor.

Tue, 05/22/2012 - 12:41 | 2451414 YungHungAndLegal
YungHungAndLegal's picture

TOTALLY HILARIOUS!  Like a dog dancing around a spot in the snow before he drops a steaming pile of shit.  We've all seen it before but somehow it's still gratifying to watch.

Tue, 05/22/2012 - 13:17 | 2451558 NotApplicable
NotApplicable's picture

He's certainly the best one-handed typist I've ever seen!

Tue, 05/22/2012 - 12:41 | 2451413 Matt
Matt's picture

Does anyone else find Reggie Middleton talking about Reggie Middleton in the third person a little odd?

Tue, 05/22/2012 - 13:52 | 2451677 Normalcy Bias
Normalcy Bias's picture

As long as it doesn't turn into "The investor/blogger formally known as Reggie Middleton..."

Tue, 05/22/2012 - 13:42 | 2451640 Trimmed Hedge
Trimmed Hedge's picture

"Jimmy has a big crush on Elaine..."

"George likes his chicken spicy..."

Tue, 05/22/2012 - 12:32 | 2451373 Kickaha
Kickaha's picture

The Facebook situation is hilarious.

Wall Street, consistent with their self-image as well-connected Masters of the Universe, routinely under price new issues just so they can allocate blocks of shares to their best customers as a big "thank-you" for past, present and future business.  I've always felt they allocate some blocks for themselves, too.  What a freakin' conflict of interest and utter failure to properly represent the company whose initial stock offering they are underwriting.  Yet, it is considered "business as usual".  When the underpriced initial offering hits the markets, the price gets bid up, and the insiders all make sort really nice money with little risk.

So the Facebook public offering gets overvalued, the price drops, and all the corrupt entities who lined up for supposedly risk-free stock flipping act as if they were wronged?   They all got what they have been deserving for decades, or at least a small fraction of it.

Tue, 05/22/2012 - 12:41 | 2451398 Winston Smith 2009
Winston Smith 2009's picture

The steps to reality:

Facebook Inc (NASDAQ:FB)

http://www.google.com/finance?cid=296878244325128

At this rate in a few weeks it'll be down to what it's worth, $2/share.

 

Tue, 05/22/2012 - 15:30 | 2452270 Dr. Acula
Dr. Acula's picture

In a few weeks it will be delisted.

Tue, 05/22/2012 - 15:29 | 2452265 CuttingEdge
CuttingEdge's picture

Give FB the benefit of the doubt. $5 a share for a cap at 10x earnings of $1bill per annum.

The question has to be asked: How the hell are people so utterly bereft of more than 2 fucking braincells to believe it was worth 100x?

Great enjoyment watching them bleat from here on in.

Fucking morons.

Tue, 05/22/2012 - 17:21 | 2452861 walküre
walküre's picture

Same reason LNKD is trading at close to 700 x valuation.

Tue, 05/22/2012 - 12:15 | 2451306 Zero Govt
Zero Govt's picture

".. I have been able to clearly and granularly articulate that Facebook was grossly undervalued a year ago.."

you mean overvalued don't you?

Otherwise just great Reggie

Tue, 05/22/2012 - 13:18 | 2451564 j0nx
j0nx's picture

I knew the minute I saw that mistake that it had to be Reggie who wrote this drivel. That and his always patting himself on the back for being the only one to be able to see things as they truly are. Sigh...

Tue, 05/22/2012 - 12:02 | 2451252 Mudja
Mudja's picture

Expect Scott Devitt to be fired for "failing to meet performance expectations".

Tue, 05/22/2012 - 12:00 | 2451246 erheault
erheault's picture

Surprise the odds are allways on the houses side wheather it is Las Vegas or Wall st after all both are major gambling houses, pay your dime take your chances dont like the odds dont gamble. 

Tue, 05/22/2012 - 19:24 | 2453253 Sequitur
Sequitur's picture

Captain Fuckerberg and Farcebook: the stock of dreams! It's unsinkable. Do you hear me? Unsinkable.

Tue, 05/22/2012 - 14:25 | 2451843 bank guy in Brussels
bank guy in Brussels's picture

Not only a house casino game, but as to Reggie's question in the article title:

« Why Shouldn't Practitioners Of Muppetology Get Swallowed In A Facebook IPO Class Action Suit? »

The answer which Reggie should know, and which smart European businessmen know, is that:

- The US courts and judges are owned and bribed by the same banksters backing and using Goldman, JPM etc.

- Most 'class action suits', like racketeering-RICO lawsuits and most US lawsuits of any kind, are dismissed by America's corrupt judges, unless there are banksters or oligarchs who want some 'action' for their own interests.

90% of all this criminal sh*t going on in America would not happen at all, if the US judges were not already bribed and leashed and in the pockets of the big criminals.

Tue, 05/22/2012 - 11:59 | 2451244 hotkarlandthecl...
hotkarlandtheclevelandsteamers's picture

Wasnt LNKD overvalued at $40 as well according to a small budget shop?

Tue, 05/22/2012 - 14:54 | 2451960 Precious
Precious's picture

The manipulation of retail investors won't end until the last retail investor is broke.  Just like the TSA abuse of airline passengers won't end until Americans refuse to fly.  It's as simple at that.  You sign up for abuse, then don't blame the abuser.  Americans could end 90 percent of their problems in one year.  But they won't.  Instead they will continue to support unionized education, managed healthcare, redistribution of wealth, and government bloat.  Americans are at fault for every awful thing that happens to them.  They no longer have the will to change.

Tue, 05/22/2012 - 14:56 | 2451992 Jonas Parker
Jonas Parker's picture

The last retail investor has to cash in his chips and refuse to play in a rigged market, leaving only the "big boys" to screw each other.

Tue, 05/22/2012 - 16:15 | 2452566 Paul Bogdanich
Paul Bogdanich's picture

This talk of lawsuits is silly.  All the laws are now various iterations of caveat emptor and if you somehow decided to pay tribute to Mr. Zuckerberger then you deserve what you get.  I will say this though.  They sold too much stock to retail for their own political good.  All those women who use facebook and bought some shares (buy what you know) are oblivious to how corrupt the politicians actuually are and how they have turned the markets into a casino and when these facebook users / investors start asking questions because they were sold $18.00 stock for $38.00 that is going to do political damage.  As well it should.   

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