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The Incredible Irony Of Morgan Stanley's Facebook Post-Mortem

Tyler Durden's picture




 

Just after the market close on what will probably go down as the worst day in history for every stock-broker-come-private-wealth-commission-taker's wealth-manager's future business (that would be the Facebook IPO - or as some call it "Blue-Friday"), the head of Morgan Stanley's 'Consulting Services Group' sent what is likely the worst timed, worded, and ironic self-congratulatory email of all time. James Walker, the MD of the group (correction - Andy Saperstein - who later blamed the NASDAQ for all his woes)- which manages $385 billion of client assets and is the nation's largest managed accounts business - was not wrong in his summation that this IPO was "orderly, fair, and well-communicated" and "will have a long-lasting impact on our clients and the organization". We assume he didn't mean "finish it" as one can only imagine the breadth of these clients who ended up stuffed full of the worst large IPO of the decade.

 

 

 

and in case you didn't know who James Walker and his new role in Consulting Services...

Morgan Stanley Smith Barney Names James F. Walker Head of Consulting Services Group

 

NEW YORK--(BUSINESS WIRE)--Morgan Stanley Smith Barney today announced the appointment of Managing Director James F. Walker to head the Consulting Services Group, the industry-leading provider of investment consulting and managed account services.

 

Mr. Walker, 47, succeeds James J. Tracy, who was named in July as Chief Operating Officer of Distribution and Development for Wealth Management in the U.S., Morgan Stanley Smith Barney. Mr. Walker will continue to report to Paul Hatch, Head of the Investment Strategy and Solutions Group.

 

“Jim Walker’s extensive industry experience, deep knowledge of Consulting Services and close rapport with Financial Advisors and clients make a great leadership combination. I look forward to working with him as we drive investment excellence and build on the historic leadership of our Consulting Services Group,” said Mr. Hatch.

 

With over $385 billion in client assets, the Consulting Services Group is the U.S. wealth management industry’s managed accounts leader, with a market share of nearly 21%. It also leads in several of the fastest growing managed account categories, including rep as portfolio manager (35.3% market share) and unified managed accounts (33.8% market share). (Source: Cerulli Associates 2Q 2010 Summary, August, 2010).

 

Mr. Walker most recently served at Morgan Stanley Smith Barney as Chief Operating Officer of Investment Strategy and Solutions, with responsibility for strategy, coordination and overall business leadership. Prior to this position, he was Director of Finance, Risk and Strategy for Citi Global Wealth Management Investments, having joined Citi in 2006 as COO of Investment Advisory Services.

 

Earlier, Mr. Walker held a succession of leadership positions over 20 years with Merrill Lynch’s Global Wealth Management Group, including Chief Administrative Officer for the Global Private Client business, complex manager positions in Wellesley, MA and Norfolk, VA, and Midwest regional sales manager. He began his career in 1985 as a Financial Advisor in Washington, D.C. and Northern Virginia.

 

He received his B.A. in economics from Catholic University of America, and attended the Massachusetts Institute of Technology as a Sloan Fellow, where he received a S.M. in management science and continues as a lecturer. He is a Certified Investment Management Analyst and member of the Investment Management Consultants Association.

Correction - the email was from Andy Saperstein - national sales
MD (i.e. retail distribution) - who later blamed the NASDAQ for his
woes

 

Perhaps this is a better representation of Andy's future...

 

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Sat, 05/26/2012 - 22:25 | 2466523 CaptFufflePants
CaptFufflePants's picture

Hey a douche bag and he works in finance, how about that...

Sat, 05/26/2012 - 22:31 | 2466529 Colombian Gringo
Colombian Gringo's picture

Yeah, I know douchebags, and he qualifies. He is so handsome and I love his wallet, er package.  Signed Modern Douchebag American Golddigger Female.

Sat, 05/26/2012 - 22:37 | 2466541 knukles
knukles's picture

Jesus...

 

 

I've seen men killed in cold blood for lesser gravitas.

Sat, 05/26/2012 - 23:26 | 2466616 prains
prains's picture

keep up the mediocre work morgn schtanley

Sun, 05/27/2012 - 02:26 | 2466757 Oh regional Indian
Oh regional Indian's picture

I like Margin Stanley.

Margin Stanley. Makes them sound like a cheap butler.

ori

Sun, 05/27/2012 - 09:07 | 2466960 JPM Hater001
JPM Hater001's picture

my portfolio left Smith Barney just before the acquisition.

Mon, 05/28/2012 - 00:24 | 2468497 FEDbuster
FEDbuster's picture

I wonder how their clients felt after being Zucked?

Sun, 05/27/2012 - 02:26 | 2466758 jez
jez's picture

How much did MS lose again, propping up the price on the opening day?

At least we know now that they lost it in an "orderly" way.

Sun, 05/27/2012 - 10:38 | 2467056 Colombian Gringo
Colombian Gringo's picture

Gravitas, is that what makes my breasts sag, signed product of the US educational system?

Sun, 05/27/2012 - 10:41 | 2467059 JamesBond
JamesBond's picture

LOL

 

So true at so many levels

Sun, 05/27/2012 - 09:08 | 2466962 Tsukato
Tsukato's picture

 Online I found a list of "bad words" which red flag emails, texts, etc. by the authorities. I thought to myself " most people are too afraid to ever rise up against the man, but perhaps there is some passive-aggressive action that most people could be bothered to do, and could keep the g-men busy/overloaded". This list of words should be spread to everyone, and attached at the end of every message we all write online, during chat, emails, etc. Please take this list, and pass it along to everyone you know. Thanks and vaya con Dios. Here is where to find the list: http://www.dailymail.co.uk/news/article-2150281/REVEALED-Hundreds-words-...

Sun, 05/27/2012 - 04:02 | 2466809 williambanzai7
williambanzai7's picture

Y U NO BUY GUY

Sun, 05/27/2012 - 08:53 | 2466942 CPL
CPL's picture

B grade stock?

 

Y U No A+ Grade?

Sun, 05/27/2012 - 14:21 | 2467377 thismonkeydoesn...
thismonkeydoesnotdance's picture

+1000000000000

Sat, 05/26/2012 - 23:38 | 2466537 NeedleDickTheBu...
NeedleDickTheBugFucker's picture

Done in way that was orderly, fair, well-communicated....

The question is to whom?

Sun, 05/27/2012 - 03:28 | 2466789 urbanelf
urbanelf's picture

Prisoner #2466537 will stop asking questions.

Sun, 05/27/2012 - 11:20 | 2467094 Matt
Matt's picture

It all depends on who and how the words are defined. Fairness, especially, is in the eye of the beholder.

 

Besides, other than that whole "giving lower revenue guidence to select institutional investors" thing, most of the blame goes to the HFT algos, right?

Sun, 05/27/2012 - 12:46 | 2467247 dizzyfingers
dizzyfingers's picture

Matt: "It all depends on who and how the words are defined. Fairness, especially, is in the eye of the beholder."

Bubba-speak?

Sat, 05/26/2012 - 22:39 | 2466546 JackT
JackT's picture

People can only blame themselves, even though they will scapegoat anyone they can.

Sun, 05/27/2012 - 00:35 | 2466698 mendigo
mendigo's picture

I think the client here was FB et al.

Seems to me that MS pretty much nailed it for the client.

The valuation was never there.

Folks need to get real.

Sat, 05/26/2012 - 22:52 | 2466552 guinea
guinea's picture

I think our entire admissions process (MBA, undergrad) and corporate HR hiring system selects for sociopaths, since applicants are constantly forced to sell themselves up to absurd superhuman levels.  The ones who make it through the cut are probably the most shameless sellers of them all.  I went through some aspect of it myself when I applied to medical school, but at least we had solid grades and test scores to back ourselves up, and even then I felt a little dirty bragging about my research.  The MBA selection process in comparison is much more amorphous and about "making the sale" with their emphasis on Powerpoint presentations and resumes. 

This email was clearly written by a sociopath.  But we reward a douche like this and consider him as having good social and leadership skills.

How much talent is lost and undiscovered due to shitty ass HR requirements and clueless HR people?

Sun, 05/27/2012 - 02:54 | 2466771 hidingfromhelis
hidingfromhelis's picture

It's self-perpetuating too.  These people, once they attain positions with power/influence due to their sociopathic personalities, encourage hiring of others like themselves.  No wonder we're in the crapper.

Sun, 05/27/2012 - 06:15 | 2466851 LeBalance
LeBalance's picture

but all the roaches have gravitated to the motel..erm financial sector...erm public service sector...so the pest control can commence with relative ease.

Sun, 05/27/2012 - 08:10 | 2466901 hooligan2009
hooligan2009's picture

i am astill optimistic that we are only talking about the 10%, led by the 1% who think they have a monopoly on financial well-being

Sun, 05/27/2012 - 06:55 | 2466871 hooligan2009
hooligan2009's picture

Firstly, declaration of interest. I have an MBA. I chose the MBA (Executive) instead of a CFA because in 1987, the world was a little precarious and I thought it might come in handy to instil any missing common sense from starting up and running a business. It is just that. You don't become a salesman because you have done an MBA. I didn't have a degree so I had to do the IQ tests (yes I know if the average is based on moronics that doesn't mean much) but I also had to gain a degree with a minimum of 72% across all modules in the first year, to be able to proceed to the MBA qualification modules (basically 16 hour days for three years). There are a few components that I still use in my present work, but none of them includes sales techniques. I learned these from an insurance company (you know, Relax, Disturb, Reassure and Sell). What I have seen is that it is not the qualification that drives business decisions, it is short termism and panic. Referred to in MBA teachings as "bush fire management" rather than strategic planning. The outcomes we see are more to do with a complete lack of understanding of quality right across society, other than in some notable exceptions.

It occurs to me that the sellers of Facebook were happy at 28 dollars and probably sold there to Morgan Stanley, who pocketed the difference by ramping the IPO. We are splitting the difference between a 38 dollar IPO sale price to muppets and a 28 dollar buy price to MS. Right price? Well we can all guess the discounted value of free cash flow with an assumption about redundancy in five years and a level competitive playing field (think Yahoo v an emerging Google pre- and since Y2K). 

Sun, 05/27/2012 - 07:02 | 2466872 jekyll island
jekyll island's picture

There is an additional number of shares available to MS for handling the IPO.  It's kind of like printing money - they can sell them and pocket the proceeds in addition to the fees that they charge. 

Sun, 05/27/2012 - 08:10 | 2466902 hooligan2009
hooligan2009's picture

free shares?

Sun, 05/27/2012 - 16:08 | 2467558 ZeroPower
ZeroPower's picture

Syndicate managers (who are responsble for pricing and allocating to the bidders new debt or equity issues) get some allocation at less than market value.

Sun, 05/27/2012 - 17:05 | 2467121 Goldtoothchimp09
Goldtoothchimp09's picture

Why is it that MBAs relish in tossing around jargon and are such vapid, vacuous Vags?!

hint:  there is no point to your entire post hooligan2009

Sun, 05/27/2012 - 14:57 | 2467434 Larry Dallas
Larry Dallas's picture

Considering that everyone who works on Wall Street is a salesman, and I mean everyone and I'm speaking from my own personal experience, doesn't it make sense that those who can sell the hardest gets to the top?

Maybe their not as blantant as a carival hawker, but those who are the wealthiest generally have one thing in common: the ability to sell their ideas and influence others.

 

Sun, 05/27/2012 - 00:09 | 2466564 l1b3rty
l1b3rty's picture

Crash JP Morgan Buy Silver @ Silver Liberation Army

 

Sat, 05/26/2012 - 22:52 | 2466573 Caviar Emptor
Caviar Emptor's picture

Wall Street has been in a state of pseudo-nationalization since 2008: fully bailed, recaped, accounting rules suspended, and an ongoing guaranteed revenue stream from the Fed teet. 

Should we be surprised that they botch things that used to be important in terms of profit and take home pay?

Not when they already know that they're going to be supported no matter what.  

TBTF, TBTSucceed

Sun, 05/27/2012 - 03:51 | 2466801 The Monkey
The Monkey's picture

True, but investors have been chasing profits based on PE, PEG, etc as they always have. Herein lies the conundrum. The market has not solely rallied on the Fed. The market has rallied on earnings momentum. The magnitude of the rally was greatly enhanced by the Fed. The Fed can chase out shorts and help change earnings incrementally by weakening the dollar. But more importantly Fed policy affects risk perception and thus changes flows. If investors are subject to a central bank that actively works to reduce the value and returns of risk-free investments (cash equivilents), they perceive other investments as less risky on a relative basis.

Ultraloose policies always have a payback. Prices that were unnaturally levitated on the way up set up the conditions for a spectacular fall when rate of change moves into negative territory. The Fed suppressed the price of risk and now it's payback time for the grand experiment.

A lot of people are going to be rather pissed off soon, so I trust those currently at the helm are rehearsing their story.

Sun, 05/27/2012 - 09:44 | 2466999 disabledvet
disabledvet's picture

while i disagree that "the Plan" was to levitate prices across the board (stick to what's doable: keep interest rates at or near zero so the country doesn't have a financial weapon of mass destruction go off in Washington instead of New York where it already has) i do agree "the market apparently too it that way" and bid up the prices of everything across the board. while tactically the dollar did weaken, commodities recovered from their collapse in 2008, treasuries initially sold off dramatically, the Administration when on "the mother of all spending binges" and "inflation trades" have been the core of the BULK of all trading strategies on The Street...in fact (with the media megaphone screaming SURE THING!) i think you are right. Now the "Grand Speculations" in commodities, unlimited pricing power and dollar shorting are coming home to roost. Treasuries continue to surge, the dollar is now clobbering the entire planet, forget the "euro zone banking system"...the EURO ZONE ITSELF is on the verge of collapse, China is tanking, the BRIC's are sinking like a brick--in short THE PHUCKING POSERS ARE DEAD AGAIN! Now the REAL GAMES begin...namely "NOW Y0U PHUCKING PAY ASS WIPE."

Sun, 05/27/2012 - 12:53 | 2467257 dizzyfingers
dizzyfingers's picture

 "NOW Y0U PHUCKING PAY ASS WIPE."

Let's cross our fingers. But they're not dead till their heads are off.

Sun, 05/27/2012 - 17:26 | 2467669 The Monkey
The Monkey's picture

Don't get too bearish too fast. Bull markets die hard.

Sat, 05/26/2012 - 22:55 | 2466577 ItsDanger
ItsDanger's picture

MS will be facing a multitude of lawsuits on this one.  The poor execution of trades has more to do with the exchanges.  But the non-disclosure of earnings estimates is on MS big time.  Im short MS from 21 to be fair here.  Full disclosure of estimates is a big part of the IPO process and it seems they have failed in that area miserably.  (or perhaps suceeded depending on your point of view)

Sat, 05/26/2012 - 23:05 | 2466585 El Hosel
El Hosel's picture

MF Global/JPM/MS/GS/C/BAC/WFC/JEF....... Too Big to Fail, too Big to Bail, too Big to Jail.  The billionare boyz club  frying their own nuts, in broad daylight.

 pass the Crisco Banker Bitchez.

Sat, 05/26/2012 - 23:18 | 2466604 I should be working
I should be working's picture

Good call, I'm starting to think to can just be short most financials all the time.

They should make an ETF, long all sectors short financials. Bet it would be up 20% since 2007.

Sun, 05/27/2012 - 00:42 | 2466703 Divine Wind
Divine Wind's picture

Fricken brilliant. The ultimate contrarian investment.

Sat, 05/26/2012 - 22:57 | 2466579 Cursive
Cursive's picture

His e-mail belongs on the $10,000 pyrmiad as an answer to "Things You Say to Justify Your Pathetic Existence."

Sat, 05/26/2012 - 23:01 | 2466582 Morrotzo
Morrotzo's picture

I don't quite get the joke. Is that a man being thrown under some passenger vehicle? Could it possibly be a bus?

 

 

Sun, 05/27/2012 - 11:31 | 2467109 Matt
Matt's picture

yes, it is a man being thrown under a bus.

Zerohedge is implying that Andy will be the one to take the blame for the failure.

Sat, 05/26/2012 - 23:16 | 2466592 I should be working
I should be working's picture

Yeah go team! Way to create value for our shareholders, oh wait...

Ah screw it, who cares about that. Way to rip off some muppets on our way to a fat bonus. Meanwhile hope you don't own FB, MS or pretty much any other financial for that matter.

With the pleasure these assholes take in ripping off their shareholders it's a wonder they have shareholders...

Sat, 05/26/2012 - 23:14 | 2466596 faustian bargain
faustian bargain's picture

Morgan Stanley Smith Barney. We make money the old fashioned way: with insider trading.

Sun, 05/27/2012 - 12:44 | 2467242 dizzyfingers
dizzyfingers's picture

"Morgan Stanley Smith Barney. We make money the old fashioned way" That commecial always bothered me.

Sat, 05/26/2012 - 23:17 | 2466601 Dineroguru
Dineroguru's picture

Hey they were just doing God's work, just like Lloyd, Jamie, John, et alll

Sat, 05/26/2012 - 23:18 | 2466605 Raymond Reason
Raymond Reason's picture

Careful, he's using some kind of advanced neuro linguistic hypnotic technique. 

Sun, 05/27/2012 - 00:11 | 2466674 boogerbently
boogerbently's picture

NO,

I'm baking him a cake as we speak.

Sat, 05/26/2012 - 23:30 | 2466621 sitenine
sitenine's picture

Earth to Walker.  Your breaking up Walker.  Come in Walker!  Shit...we've lost him.

Sun, 05/27/2012 - 06:20 | 2466853 LeBalance
LeBalance's picture

ground control to Sky Walker...

check your email and please try to land this thing...

 

ground control to Sky Walker....

Steve, you are breaking up breaking up....

 

he is dead, Jim.

Sat, 05/26/2012 - 23:31 | 2466623 skepticCarl
skepticCarl's picture

Mostly, he was counting on his staff being young, recent college grads; i.e. illiterate.

Sun, 05/27/2012 - 21:02 | 2468175 Vlad Tepid
Vlad Tepid's picture

He doesn't seem particularly literate (or lucid) himself.  My HS English teacher would have had a field day if he had turned that in for an assignment.

Sat, 05/26/2012 - 23:31 | 2466625 LoneStarHog
LoneStarHog's picture

Are you sure that this is not the famous stand-up comedian Jimmy Walker who played J.J. on the old show Good Times, because this guy is a side-splitting riot?

"Dyn-O-Mite" > http://www.dynomitejj.com/front.html

Sat, 05/26/2012 - 23:36 | 2466635 unnamed enemy
unnamed enemy's picture

someone please give the man a bonus.

 

Sat, 05/26/2012 - 23:39 | 2466639 JohnKozac
JohnKozac's picture

This will surely trigger his $45 million Golden Parachute on his way out the door for "a job well done."

Sat, 05/26/2012 - 23:55 | 2466662 blunderdog
blunderdog's picture

Complimenting your team on their accomplishments is a great way to maintain good morale and build loyalty.

Sun, 05/27/2012 - 00:26 | 2466688 palmereldritch
palmereldritch's picture

I suspect Jimmy is giving himself a real pep talk right now

Sun, 05/27/2012 - 02:57 | 2466772 hidingfromhelis
hidingfromhelis's picture

Heckofa job Jimmy!

Sun, 05/27/2012 - 00:01 | 2466667 monopoly
monopoly's picture

This is all so surreal. I cannot even utter another word.

Sun, 05/27/2012 - 00:07 | 2466672 TheCanimal
TheCanimal's picture

This is even worse than the Groupon IPO Morgan Stanley fucked up before the FacePiss debacle.

Sun, 05/27/2012 - 00:28 | 2466694 q99x2
q99x2's picture

They did a terrible job and so did he. Under the bus with him.

Sun, 05/27/2012 - 00:37 | 2466700 El
El's picture

So...we are still discussing Facebook.

Sun, 05/27/2012 - 00:55 | 2466709 Divine Wind
Divine Wind's picture

There is no possible way that someone could write a message like this after the events of that day. Then again, I live in Realville.

I really get the feeling this posting was written before the trading day started and was somehow timed for release.

Given all that transpired that fateful day, this chap was either in an emergency board meeting or trying to get out of Manhattan without any new holes in his body.

 

Sun, 05/27/2012 - 00:58 | 2466712 Piranhanoia
Piranhanoia's picture

Seems like a slick way for the government to get control over FB without having to do more than let the algo's do the talking.  Who can cause the exchange to screw up and nobody gets to know? Maybe  Zuck is being hesitant to allow total spying on his sheep and his investors?  Who bought the shares that actually got traded?   The exchange did it?   Seems pretty unlikely considering the downsides of lost wages and found lawsuits.

 

Sun, 05/27/2012 - 00:59 | 2466713 Trimmed Hedge
Trimmed Hedge's picture

I see nothing wrong with this email

The clients include some of the pre-IPO investors of FB

I seem to recall reading a while back that the IPO price could be as "low" as $28

Considering they got it out at $38 is definitely, at least from their perspective, a job well done...

Sun, 05/27/2012 - 01:16 | 2466714 Dr. Engali
Dr. Engali's picture

Okay. I'm a little lost. Since when does investing in an
IPO guarrantee a positive return? Everybody here knew this thing was a big runny elephant turd from the beginning. Anybody who bought into the hype and didn't do their due diligence deserves what they got if the bought into this steaming pile of shit. I'm not trying to defend MS , I've been shorting them , but for cripes sakes these idiot " investors" need to get a grip on what risk/reward means.
As far as the email goes, I wouldn't expect anything less from MS.

Sun, 05/27/2012 - 06:28 | 2466858 css1971
css1971's picture

You don't understand. With socialism there can be no losers.

Sun, 05/27/2012 - 11:54 | 2467142 Elwood P Suggins
Elwood P Suggins's picture

You don't understand. With socialism there can be nothing but losers.

 

There, fixed.

Sun, 05/27/2012 - 09:06 | 2466958 Absinthe Minded
Absinthe Minded's picture

No Shit. How can these dopes not see that these IPO's are just a grab for cash before the crash. As far as this clown, "I'm real proud of the job that you did." Sounds like a sixth grade edumacation to me, that doesn't matter though, he obviously has the blue blood running in his veins.

Sun, 05/27/2012 - 03:04 | 2466775 HungrySeagull
HungrySeagull's picture

Blue Friday.

I'll second it.

I wonder how many shots of liquor it took for someone to type that floater of a message. I wonder if you shove it into the toilet tank, will it be cheaper and better than tidy bowl?

Fucking hell, I have handled incidents going from bad to worse with professionalism quite a few times... making cold clinical decisions in the last seconds before life or death.

We used to call the after action a "Bitch session" where a one way very loud and profane conversazione is held.

As the Youtube Hiter will say "WTF!"

Sun, 05/27/2012 - 03:12 | 2466782 farmboy
farmboy's picture

Unfortunately this is the standard way of communicating within these firms. From the point of view of Ms it is a huge success as they made commission it is irrelevant that it is a loss to the client. 

For society as a whole these organsiations are the plague. 

Sun, 05/27/2012 - 05:44 | 2466845 Alex Kintner
Alex Kintner's picture

 Woohoo, we're reached the final stage of a Classic Failed Project.
 1. Euphoria and Excitement
 
 2. Disenchantment
 
 3. Search for the Guilty
 
 4. Punishment of the Innocent
 
5. Rewards for the Guilty

Sun, 05/27/2012 - 06:26 | 2466855 LeBalance
LeBalance's picture

the story of the world according to the handlers of the script needs to go to a very irrational endpoint.

as such the actions of "men" playing by the script will seem drastically different from what normal folks would ever perform.

for example if we must get to a conclusion that requires 1 plus 1 to equal 3 then Don Rumsfeld will be up in front of a congressional panel claiming that it does and he will have Colin Powell there to say that it is so.  Therefore it must be true.

when this stuff happens do not watch the puppets, try to puzzle out the strings and the curtain behind which they lead.

Sun, 05/27/2012 - 07:42 | 2466889 Dr. Engali
Dr. Engali's picture

Can somebody please tell me where the government investigation into the GM IPO is? After all that rancid piece of dead cat meat was just as poisonous as the farcebook IPO. I mean if we are going to investigate one we should take a look at them all, right?

Sun, 05/27/2012 - 08:26 | 2466913 shovelhead
shovelhead's picture

I don't see the problem here.Everyone made a shitload of money on this IPO.

Except the Muppets clamoring to get some prison love. Mission Accomplished.

Price, P/E etc. mean nothing to gamblers. All that matters is another sucker, dumber and slower, comes in higher to buy 'the next big thing' that you got. Sometimes it doesn't work out.

This is not investing. This is jackals fighting over spoiled meat. Did any reasonably sane person really believe those original revenue estimates from these swindlers?

C'mon really?

Whatta buncha maroons.

Sun, 05/27/2012 - 09:48 | 2467004 Nukular Freedum
Nukular Freedum's picture

Fwiw copypaste on topic from my blog today:

Analysts today are claiming that the Facebook IPO debacle is indicative that no new bubble is forming in the internet sector. But I think they are conveniently ovelooking at least two important points. Firstly (and learning from the former dotcom bubble) the people who priced Facebook seem to have already priced the bubble into the IPO so as to maximize their own gains. In other words the stock already had nosebleed valuation even before trading began, this itself is indicative of a bubble. It also indicates that they had learned how to play the bubble and leave absolutely nothing left for the public or for speculators. 
 Furthermore, and this relates to my second point, the stock still ramped over 15% just after the opening bell, to even higher nosebleed valuations. So the bubble was clearly anticipated by the people pricing the stock. But why then did they leave this 15% on the table? Was it a miscalculation by them? Should Zuckerberg and co. complain? 
 I think not because I feel confident that this 15% gain on open was an attempt to manipulate prices higher by the syndicate operators. I also suspect that the alleged order errors on the first day were not really errors but facillitated the aforementioned manipulation by the syndicate. By selecting which orders they accepted they were able to ramp the stock at the open in the hope of sparking further retail buying. Quants call this phenomena “autocorrelation”. So as regards the order “errors” one is left asking “qui bono” who benefitted? And it is clear that, although the public did not entirely fall into their trap, the syndicate benefitted.
 Furthermore and as a final point it is now the case that Facebook can blame Nasdaq for any investor unrest going forward, which is an additional advantage for Zuckerberg and co. I strongly suspect that shifting their listing to NYSE was part of their plan all along, hence the choice of FB as their ticker symbol. This is an appropriate ticker symbol for NYSE not for Nasdaq and yet there they are on the Nasdaq! So we shall have to wait and see just what transpires about this.  
 Certainly Facebook themselves can have no cause of complaint against Nasdaq. Everything went swimmingly from their admittedly crooked perspective and they have even succeeded in making any future offering from luckless Twitter problematic! How many more pluses could they possibly hope for? Still it seems appropriate somehow that a company conceived in fraud (see the movie “The Social Contract” for example) should go public in fraud and acrimony as well.
(pearlsforswine.wordpress.com)

Sun, 05/27/2012 - 10:57 | 2467074 jal
jal's picture

Does anyone think that a 21 yr old had the finesse to print money,(IPO), and then sell it to the smartest financial wizard that our financial system has created?

 

I would like to know who were the people behind the curtain, at Facebook Inc., who were instrumental in organizing one of the largest printing scam ever on those who are suppose to know how to mange other peoples money.

 

 

 

Sun, 05/27/2012 - 11:12 | 2467082 Downtoolong
Downtoolong's picture

When you have power, there’s an infinite number of ways to rationalize how you use it to your advantage at the expense of others.

My favorite definition of Tyranny is; the exercise of a power that no one should have.

Sun, 05/27/2012 - 12:22 | 2467098 Downtoolong
Downtoolong's picture

The Facebook IPO is a glaring revelation of how stock prices only achieve lofty levels when Wall Street coordinates, conspires against investors, and says let it be so. This is especially true in recent IPO’s.  When that coordination and conspiracy breaks down, we end up somewhere closer to the truth of fair value. Actually, we won't really know that until these dealers and intermediaries liquidate their entire inventory. You can’t blame the outcome on a NASDAQ glitch forever. If the value in Facebook was truly there at $38-60, don’t you think these financial firms could have found a way by now to find buyers for the excess inventory they hold.  As long as Facebook remains below $38 it’s an open admission of Wall Street fraud, right in front of everyone’s face. If you can’t see it, you might be one of the  99% who should never even think about investing in the stock market to begin with.  


The way I read that email is this; “alright group, we screwed up and missed a big opportunity to rip off investors this time. But, don’t worry, there will be other opportunities. Don’t give up. We still got six months to go before bonus season.”

Sun, 05/27/2012 - 13:17 | 2467303 Papasmurf
Papasmurf's picture

This IPO was a great success for the company, Morgan Stanley and Wall Street.  The other complaints are irrelevant.  

Sun, 05/27/2012 - 16:32 | 2467587 robertocarlos
robertocarlos's picture

He is certified.

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