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The Facebook Maginot Histogram - Here Is How Morgan Stanley Just Gave Up
Update: well, our feeling was correct:
- MASSACHUSETTS SUBPOENAS MORGAN STANLEY OVER FACEBOOK
- MASSACHUSETTS SEEKS MS COMMENTS TO INSTUTIONAL INVESTORS ON FB
- MASSACHUSETTS SUBPOENAS MORGAN STANLEY OVER FACEBOOK COMMENTS
It is by now well-known that certain large banks were heavy defenders (by mandate and then by sheer panic) of the Facebook share price post-IPO. Margin Stanley appears to have been the name of choice for this defender, and by dint of primary greenshoe allocation, and today's price action suggests that whether it was them or not - whoever it was just gave up their undying defense. The following volume profile (how many shares were traded at each price point since the share's release) illustrates dramatically the massive bid-side presence (remember there are no short-sellers per se) as they defended first $42 (78mm shares bid), $41 (11.6mm shares bid), $40 (18.4mm shares), $39 (3.9mm shares), $38.50 (6.5mm shares), and finally $38 (22.7mm shares bid) before the first day or two were over. This is at least 140mm shares that were bid for above the volume-weighted average price of $37.98 across all 844mm trades that have occurred since Facebook began trading on NASDAQ. $32.1bn of trading volume across the three days. It appears that today's action - which seemed to be left undefended as algos were in charge was the breaking point for MS.
Think of the green arrow (oval) as the pivot on the teeter-totter of volume - which is now volume-weighted at almost perfectly the IPO price...
Next, for all the extended debate in the media and the blogosphere of the simple concept of a Greenshoe it becomes painfully clear that virtually nobody in the financial media space has even opened one chapter of a Series 7 book (and certainly not done a refresher course). No matter: the math is simple: if MS was the bid at or above $38 on a VWAP basis, and as the chart above shows they clearly were, they lost money using a reference synthetic "short" basis of $38, if they defended more than 15% of the float, i.e. bought more than 15% of the 484mm shares issued.
For all those who are naively assuming that just because the stock price has plunged, that MS can make money because it had a parallel short as it was IPOing: wrong. MS does not have a right to pocket the upside, and merely the cash proceeds to the company are less. As to whether and how much pain MS has taken, we will have to wait until the June 30 press release, or some ad hoc JPM-esque press conference.
Finally, our first tweet today was the following. We hope some enterprising lawyer will not disappoint us:
Will Facebook set the record for shortest time from IPO to shareholder class action lawsuit? We may find out today
— zerohedge (@zerohedge) May 22, 2012
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Ahh the French rallying cry "We surrender!"
Apropos of nothing, who would win in a fight: Italy or France?
The Irish
ITYM the Swiss.
The Rothschilds
Facebook, faceplants!
FaceCrook!
Payback is a bitch Zuckerberg! Now FaceCrook carries a bad name on Wall Street.
I bet California's pissed they didn't get inside info on this deal so they could balance their budget screwing people.
LOL
'Apropos of nothing, who would win in a fight: Italy or France?'
I guess they'd both end up on each others side wouldn't they?
confused?
Who exactly are all these muppet investors that still "invest" in equities? The whole sordid tale of Facebook deciding to IPO when it became clear to everyone in the industry that revenues had peaked. Then the FaceBook insiders bailing out, the massive road-show to sucker muppets in, the massive last-minute increase in the IPO price, the almost-funny CNBC hype-machine spinning into overdrive, the hiding of material analyst info at the last minute.... it's all such an obvious story of "screw the investor".
It would be one thing if this story were unusual, or even occasional. But this story is 100% par for the course. It's *the* game: Swap sucker money for insider money. Lather. Rinse. Repeat.
And somehow, miraculously, incredibly -- there are still muppets eager to hand Wall Street suits their money.
And the even more humorous anecdote to the whole story is: These same poor muppets also think that a lawsuit is going to get their money back from the biggest, most powerul cartel in history. Good luck with that.
The only way to win is not to play. If you have money in the market -- even in your IRA. Get it the fuck out, and get it out now. This is a casino. The rule of any casino is: Don't play, and if you do play quit as soon as you're ahead because eventually you're guaranteed to lose.
Why do I have no sympathy whatsoever for these people?
Payback is a B, and he's getting it in spades. This guy thought he had the perfect scam and it didn't work, not at all. Nobody wants this stock and with all the lawsuits coming into being, people want out. Especially if yo bought it at 41 dollars a share and it's now worth 30 dollars a share.
LOL
It's NOT MS, or NASDAQ....
FB HAS no business ! Why ANYONE bought is a mystery to me.
This will go down as the GREATEST sales job in history.
Just before lapsing into obscurity, a 30 year old kid cons seasoned market professionals into buying his "dead" company, so he can pay back his original investors.
What are people going to "sue" about?
Being STUPID ???
FACEPALM
volteface
Do they make white flags as well then?
No I meant the Irish. They're called the "Fighting Irish" for a reason.
Newsflash: The Irish haven't fought since Gerry Adams sold the Army Counsel down the river, and they sure are missing out on an opportunity.
Well its been done, but it took a Corsican to beat the Italians.
MS takes the Corsican's stance on FB:
http://www.youtube.com/watch?v=Ef9qqk0CvFc
Ethics Gradient
OT, but its been bugging me.Your avatar,is that a rotary housing off a RX7?.
It's Max Fischer's cock ring... (seen through an electron microscope)...
hahahaha
It's a RX7 rotor.
Yup. I'm a complete wankel.
Wankel rotor
wankels rock!
http://www.youtube.com/watch?v=6NckAj8YVXw&feature=related
Because an avatar of a piston, rings, wrist pin and clips, connecting rod, rod berrings, cap and cap bolts wouldn't fit in such a small space.
You serious? Italians would kick the French asses.
In theory, you're quite correct, we Italians could make quick work of the Frenchies. However, it's very hard to kick something that immediately runs in the opposite direction.
In accordance with our nature, we'd simply shrug, crack open a few bottles of their wine (something earthy and approachable, like a Southern Rhone or Languedoc, rather than Bordeaux or Burgundy), listen to old Francoise Hardy sides from 1965, and wait for the stuck-up fuckers to come back -- and if they didn't, we'd take advantage of a Robert Bresson or Claude Saute retrospective at the Cinematheque, fight off their women (as our wives would kill us) then slowly return home, stealing every caper bush and mushroom in site.
There, that fixes that. We know most of you guys never marry because there isn't enough saintly women in Italy to satisfy the Italian Mother... :-)
It would be a close run thing as to who would surrender first I think.
Technically only one of you can, and then you're both on the same team, so to speak...
I think war between France and Italy would last for about a nanosecond, and then everywhere gets overcrowded as we break for lunch...
MS got zucker-punched just like those Harvard boys, who's idea he stole... This guy is pathetic...
Completely ShitFaced when they Booked that Fucker.
The Germans .. natürlich!
Is MS the next MFS ?
Just take the F out of MFS ..
CNBC is reporting that the Facebook class action suits have been ... "Lawyers, Guns and Money" baby!
Also in the news;
5:30p
BREAKING
Facebook's Zuckerberg sells 30.2 mln shares
Zuckerberg suckerpunches investors.
Made himself a cool billion. Director Thiel sold 16.8 mln shares. Who else?
The company doesn't need any money. This was a setup to transfer wealth from muppets to geeks. The big guys have Zuck's home address.
wow. lots of confidence in your mobile strategy, hey Zuck?
If the SEC weren't so busy furiously masturbating to online porn, this should be investigated as it's borderline criminal at best.
http://www.businessinsider.com/exclusive-heres-the-inside-story-of-what-happened-on-the-facebook-ipo-2012-5
The analysts cut their estimates because a Facebook executive told them to, a source tells us.
Yeah, the only thing about that is... who writes the laws again?SEC will be sending in the Keystone Cops and some Circus Clowns to get to the bottom of this!
fuck zuck
I think he screwed the system... Hat's off. Sell as much as you can at the highest price on day one. Go on honeymoon with Yoko Ono. Buy gold.
I knew I smelled gas when I heard about the IPO. I thought it was just that hoagie I had last night.
That's hopium? I always pictured huge plantations in Afghanistan.
First they vaporize it.
Facebook was loaded with gas
To lure in the lemmings en masse
The hopium high
Led sheeple to buy
When will Kleptocracy pass?
The Limerick King
The ponzi starts to catch up,
With the Wall Street hustlers cup,
So many sheep they shear,
Which they now will have to fear.
With heads a rollin,
We gots to get boilin'...
OH, I can do Irish Poems:
Mark Zuckerburg picked a real blighter
To be the Facebook underwriter.
Alas!, Morgan Stanley,
To cry isn't manly!
And defenestration's politer.
Squeeky Fromm, Girl Reporter
(PS: Defenestration is a really fun word!!!)
http://en.wikipedia.org/wiki/Defenestration
"(PS: Defenestration is a really fun word!!!)"
So is vivisection -> http://en.wikipedia.org/wiki/Vivisection
Here let me use it in a sentence: I hope you didn't get vivisected going long on the Facebook IPO!
The underwriters were left with short stock as post any IPO and typically use that as firepower to either stabilize the price or cover into a weak market. In this case, the sheer supply of FB selling overwhelmed their green-shoe option as we have seen ever since $38 was dropped (their price of FB shares in over-allotment was somewhere in the $37.5 range).
Exactly right. +1 Zero Power.
Liquidfied Hopium is a hi-pressure volatile gas that turns into solid shit when exposed to real brains.
Woo...
So its not my eyesight failing...Bell-shape curve my bottoms...
It is Darth Vader (helmet with flashing LED lights) !!!
Told you the force be with us (eh, ZH).
Credit Agricole is in default -Nationalization coming
Banco Totta will Crash BanCo Santander Performing Loans Ratios Writedowns
The Financial System is a farce.
***
SPANISH REGIONAL COMUNIDADES AUTONOMAS ARE ALL IN DEFAULT
***
SPAIN needs Debt Haircuts from 5-40% depending tranches
+ AID from MARS (500.000 Mn USD)
RESET IT¡
I'm glad MS is in there for a few cuts and bruises, but I personally won't be happy until an arm and a leg come off, and eventually the head.
More like Histoscam, am I right?
That may be so but if you are a bankster today the objective is to reap massive rewards by sinking your own ship and as best I can tell MS stock is down around 35% from around the end of March.
It takes a lot of work to sink a ship that fast.
Someone is sitting on http://facebooksuit.com/
You mean somebody besides a pornsite?
How about that, http://facebooksucks.com/ has been taken too.
The domain facepoke.com is for sale though.
facepalm or facecrook
Personally, I'd like to see follow-up interviews with some of those retail peepz who were all excited about FB & bought last Friday.
You know, like that guy opening up a brokerage acct at the ETrade office so he could buy $10K worth for him & his mother....
Ummm... that followup will likely be a murder-suicide once he realizes he'd been better off investing in Powerball tickets.
Worse yet, wait until the major holders are revealed, and pray that your local police retirement fund didn't go all in. Those people can get violent. Fast.
that would be good... maybe then the police would stop beating on the people actually speaking out against the banker rape of the world's common people.
just as soon
aas they stop throwing shit on the cops.
Well they could buy German bonds at zero percent..or they could chase returns and this was a sure bet of a quick 20% return right...everyone said so....I think you are right...when the curtain is pulled back...there will be a lot of pension funds that were chasing returns...but that is what Bernanke wants ..and forced them to do...
What amazes me is this was all about a quick buck.....nothing more...for Zukerman....for the banksters..for the insiders and there were plenty of those...the New York Buddy system at work overtime on this one...and not one gentile I bet...
Zuckerburg's famous pig!!! :-)
I believe he's living in a van down by the river.
hi :) i am one of those retail thingies, although i hyped on zh about it monday a.m. not friday, on a guess....slow to pull the trigger, and re-interated my long yesterday afternoon on zh, i am putting 5/7 of my newly established ira into fb.
all the hullabulloo aside, the one fundemental problem in the investment world's eyes is that fb has no 'business' model.
wrong.
here's one i thought of for them.
think amazon, but in reverse.
amazon delivers product to people in places.
fb delivers people to places that have product.
example:
'costco' sells under fb a 'widget'. add says more sold, lower price; all the way to cost. require pick up. toss in free day pass to newbies to get into 'costco'. if 'costco' good enough, newbie returns. if not, well, work on it 'costco'! not fb fault.
down to zip code specific and up to continent.
the transactions from fb in 'costco' can be tracked, real time, and fees adjusted accordingly. more effective fb, more fb makes, happier 'costco' is....and, oh by the way, the fb people themsleves. everybody like good deal.
and me :) cause me gonna own maybe 100 shares fb at lower/est price for fb ever.
want 'nother fb model? sure, np. they flow naturally....easily...
:)
Now if only the FED was not behnd these big banks , they could get a taste of reality also...
Gave up? Take a loss? Why that's just a faulty perspective!
MS holds 140mm shares of Facebook. Do you have any idea how much that shit's gonna be worth someday?????
They're gonna be thousandaires!
From what news I have been reading, it appears that MStanley and GSachs downgraded FB just before the opening, apparently telling only institutional investors - not retail investors. Isn't this very odd in a market that is begging, begging, begging for retail investments (not stepping on their toes, so to speak)? Is it possible that FB was manipulated into the massive debacle it has become in an attempt to take the spotlight off the far more massive and devious JPM scandal? I don't pretend to know much about the financial world, but my intuition is screaming at me that this needs attention.
odd?? It's probably illegal
Remember that GS was originally the lead underwriter. Then they let the cat out of the bag and FB got all pissy. As "retribution" the lead was assigned to MS. Kind of interesting in hindsight.
Also, WTF w the NASDAQ debacle? Seems to me that the BATS hackers were simply getting even for what was likely a hit during their IPO.
Time to get popcorn as they start to eat their own.
Funny how the next "market savior" ends up being the "market killer."
If it was intentionally manipulated that way, then I'd say they're planning on taking the whole system out soon, all while blaming it on the Mayans (or Iranians). Otherwise, they'd keep up the ole pretend and extend can-kicking apathy.
Smells like a setup or a ruse. Hurting MS and potentially taking them down. Killing NASDAQ for any potential future big IPOs.
I'm kinda jokingly suggesting that we'll soon hear about the infamous Al Kaida trading desks in the Hindukush committing financial terrorism.
"it was intentionally manipulated that way" - you got it
I think the answer is more likely to be a combination of stupidity and greed. Let's not forget that FB already did an Initial Private Offering, only available to high net worth friends of GS. Perhaps there was an agreement that they had to float before a certain date?
All I know is a lot of insiders and smart money were desperate to get out. They seem to sense that FB has peaked. In my view, it would be far better for the markets if they had decided to delay, but they weren't allowed and the blowhards at MS pushed it up. Maybe the error was by FB, who insisted that the allocation be made broadly available, so there weren't enough suckers waiting to buy "at market".
I was asked if I would buy and I said it was about 4 times overpriced, given the earnings growth numbers are way too optimistic. Anyway, they had a chance and they blew it, big time and this is going to put the reputation of the banks and exchanges even lower, if that is possible. As you say, the lead banks on the deal downgraded the fucking thing, but only told their big clients. I knew this would turn ugly, but even I am amazed how bad it is turning out.
J**s screw that again..
But hasn't everyone here at ZH--even the casual lurkers--been downgrading FB to fair value $4 or so for the last 2 years? Is a FB downgrade really needed from GS/MS? Can't anyone use their own common sense?
Correct me if I am wrong, any shares MS ended up purchasing to defend the price just get returned to FB insiders. So there is no loss for MS, they would just collect less fees as not as many shares were sold in the IPO. Am i right?
Wrong, FB insiders sold. MS is buying with its own account and losing money if it does.
/
No, because then the underwriter syndicate (of which MS was merely a part of, if lead left), could simply buy the entire float at $38 and re-IPO the company.
ok, so whatever they bought back goes back to FB treasury
any idea how many billions WERE made on opening day and WHO the beneficiaries are?
edit: other than insiders that need to file form 5 anyway?
Facebook was an AON (all or none) underwriting agreement. that means any of the allotment not sold gets eaten by the underwriters. I hope it tastes like shit.
Gave up? Price is above zero, they are still defending...
+1 they have been defending even dollar price points all the way down.
Got enough articles about Greece and FB now to add them to the sidebar menu.
Fakebook shares traded:
Day 1: 600 million
Day 2: 200 million
Day 3: 100 million
Day 4: ???
By the end of the week, Million Dollar Bonus will be the entire float...
Yeah but he's dollar cost averaging
Euro is getting crushed. Not normal.
Bank Run is the new normal.
Would love to see MDB's take on the sell off today. This will definitely be entertaining.
I know exactly what he'll say.....
Dr. Bernanke has a nice ass. I love how it jiggles during press confrences with all his nerves obviously shot due to too much Ritalin. It's those weak-kneed libertarians that need to stop supporting their wacko policies, like buying precious metals and supporting Ron Paul. Dr. Bernanke, Justin Beiber, American Idol, the Kardashians, and FarceBook are the two (or is it four??) pillars of modern economics, with ring master Tim Geithner keeping it all working seemlessly.
You libertarians are all crazy. China will keep buying the only true safe haven, US Treasuries.
Sincerely,
MDB, aka Max Fischer, "Clitoris Monday"
Maybe they should De-list !
lol
Nice tweet and Following !!!
Taxachusetts having issues with an investment bank? Mr. Frank on top of it?
More than likely he's behind it probing the depths of this dark financial tunnel.
Isn't he a bottom kind of guy?
Think he's more up front - either bending over or on his knees..
Nobody could have seen this coming. Nobody, I tell you.
Never in the course of human history have so many stupid greedy mother fucking jizz swilling humans ever assembled on wall street at one time.... Winston Churchill
No wonder New York always gets vaporized in those disaster movies. Even the Mighty Bernanko must be getting weary of Schmuks Gone Wild.
This is why I don't like being in Manhattan anymore. They are cockroaches. And I avoid their hangouts in Hong Kong as well.
New York City destruction montage (for those who can't wait)
~~~
http://www.youtube.com/watch?v=daqiw6sfDa0
I know gumshoe and green shoots but what is green shoe?
Greenshoe
Do I hear 29? 29 it is....can I have a 28?
anyone? anyone? Beuhler?
I think your decimal point is off... .0029 seems about right
http://www.forbes.com/sites/briancaulfield/2012/05/22/dell-q1-earnings-s...
so NASDAQ futures will be green by about 9:15am EST tomorrow?
GET OVER IT, IT's ALL FRAUD. WHO DOES BUSINESS WITH CRIMINALS DESERVES TO LOSE.
Meanwhile, over in smartland, I just bought more gold and silver for my clients today....miners, coins.....in the afternoon.
You see, I work for them. For some reason, they love me.
Team up with a rancher and buy some beef. They love you even more.
This pathetic failure is bound to sour even more investors on the market, which is exactly the opposite of what the street was hoping.
For example:
Last Friday, i place a limit order to buy 500 shares of Facebook, but decided to cancel the order before the Facebook IPO open. However, it would not let me cancel the order, and I do not know if i have the shares or not. I called in Scottrade customer services and they told me that they will request to cancel it. I waited all days, and still did not see my order get executed or cancel. I logged back to my Scottrade account on 1PM PST, and still did not see no confirmation. Today, I logged on to my account and noticed I have 500 shares of Facebook share at 41 dollar a shares. Right now the price is @ 34 dollar. What should I do? Do I need to sue Nasdaq to get my order cancel or reimbursement?
Figures gummit would have to go stickin' its nose into a perfectly legal scam.
Is there ANYONE ANYWHERE who believed for even a single second that FB was a $100B company? Really?
FUCK THE POOR!
You'll have to take a NUMBER!
You want them to REPRODUCE?
So...Margin Stanley will be needing a $40 Billion dollar bailout now I suppose...
FarceBook
FailBook
FraudBook
You buy this shit and you'll end up Facebroke.
FuckBernanke
They used to provide a syndicate bid for 2 weeks on a big IPO. They now fall into the Merrill Lynch category of underwriters who fail the issuer, the client and finally themselves. If they also warned off some big clients & hedgies, they will have to buy it all back. I hope MA chases them down & the SEC does too. Nobody will ever believe that this was once an honorable business & an honorable firm. Makes me sick.
Man I could never figure out how you value advertising in the first place, I know there is some magical mystery formula for it judging from all the crap that pollutes the planet but totally lost on me. In that vein I was totally lost with the dot com thing and here we are almost 14 years on with the same damned thing,that's not even a generation. Doesn't genetics dictate that it takes at least one generation for the species to actually become more fucked up than the last?
Oh.... yeah ....no wait, I just realized something as I said that again in my head........forgive me I live in a fairly remote part of the world ....... we have no walmarts here and the gene pool is more or less still intact so it is sometimes difficult for me to see this as it exists for the rest of amerika ..... hmmmmmm yeah in the context of a world where walmart people run free and are allowed to breed .... ok yeah I think I just answered my generational query ....... we are actually a generation and a half removed from the dot com thing over a 14 odd years period in those terms ....... ok yeah nevermind.
Rock on Facebook........ you inbred mother fuckers..... and don't forget to pick up your free waffle iron on the way out......
"14 odd years period in those terms "..that is three generations in WalMart land...
Yup, I have never clicked on a single ad on FB. I have hardly ever in my life clicked on an ad online, period. I guess enough people do.
So even Mark Zuckerberg is a muppet.
a muppet who sold 61 million free trading shares at or about $38
he's not a muppet, just a Harvard grad with family friends on Wall Street
Not a grad he dropped out
Corsicans are more Italian than the French. Napoleone is an Italian name
They come from the Texas of europe, Guns, farms, and independent spirit. Corsica would be a good place to weather this economic Typhoon, but they don't like outsiders.
P.S. they are the home of the vendetta.
Oh my gold, FartBook can't crash, a lot of politicians own this junk!
The lawyers are already gearing up for the class action lawsuits against MS! Quick, Etrade mothers, it's compensation time! :D
http://finance.yahoo.com/news/law-firm-levi-korsinsky-llp-214900097.html
So, what happened during the 2-hr window in the anything but transparent market?
FUCKING B-R-O-K-E-N.
Sell all long positions, the market is heaving and listing....
Quick, get Dewey Cheetum and Howe on the phone, I smell fear.
Will that be for the peekup or the Dropoff?
;-)
ori
How many times must people lose money to realize our markets are rigged/corrupt? The insiders (Regulators/politicians) who recieved free shares sold the second the market opened. Congrats to those who bought high and now hold the bag. Buy Silver and get out of the US Stock Market......... Normalcy Bias is a real bitch! So is listening to CNBC and Cramer......
The Sheeple are numerous, and dense. This might wake up, say, 1% of them at best.... provided it doesn't come between them and the NHL, MLB, NASCAR, NBA, PGA, and DWTS.
Cocaine is a hell of a drug.
This would probably be funnier to me if I actually used Fadebook and could therefore understand all of the parodies, but here it is, modern life without Facebook:
Erasebook
http://www.youtube.com/watch?v=kU1Yu3slPR4
That's good, but I think the real future will have Winston Smith at the facebook servers turning folks into certified-unpersons. Instead of a flaming memory hole, you get a simple delete button.
The future is just a shittier version of the present.
No unpersons from this particular Winston. But I do love this particluar part of the book, much of it recited in the John Hurt/Richard Burton film. Very dark:
"All the confessions that are uttered here are true. We make them true. And above all we do not allow the dead to rise up against us. You must stop imagining that posterity will vindicate you, Winston. Posterity will never hear of you. You will be lifted clean out from the stream of history. We shall turn you into gas and pour you into the stratosphere. Nothing will remain of you, not a name in a register, not a memory in a living brain. You will be annihilated in the past as well as in the future. You will never have existed."
If you don't use Facebook how can you know how many times your "friends" fart when they get up in the morning?
Here's another decent one, more creative but kinda' old, so many may have seen it. Made by an English teacher in South Korea, filmed at night on a very busy corner in S.K.:
you need to get off facebook
http://www.youtube.com/watch?v=8UouP8cRYZ8