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The Ten IPO Commandments

Tyler Durden's picture




 

Via Nic Colas of ConvergEx Group,

There's been a lot of hand-wringing about busted Initial Public Offerings of late, but the process itself is hardly rocket science.  Like Tolstoy's comment about families, every "Happy" IPO is essentially the same, while every miserable one is different in its own way.  There are rules to the successful IPO, and today we offer up Nic Colas' manual, a step-by-step checklist for investors to assess if an offering is on track.  From maintaining the illusion of scarcity to managing company and investor expectations, the road from salesforce "teach-in" to final pricing is narrow but well-marked.

I spent the better part of a decade as a senior U.S. equity research analyst at Credit Suisse in the 1990s, covering the auto and auto parts sector.  This was in many ways the heyday of the equity research function at large investment banks, largely because analysts were so deeply involved in capital markets transactions as well as mergers and acquisitions.  In my nine year run I did a variety of lead and co-managed Initial Public Offerings as well as secondary equity issuances for the likes of Chrysler, General Motors, Budget and Dollar Thrifty Rent-a-Car, Goodyear Tire, Ducati, as well as a variety of lesser-known auto aftermarket parts companies and foreign automakers and suppliers.

The process of raising capital in U.S. equity markets has changed very little in the last decade – far less than other parts of the market such as electronic trading.  Companies still choose bankers based on formalized pitch meetings with positioning and valuation discussions.  Analysts do play a smaller role at the front end of the process, but their buy-in is every bit as critical during the marketing of the deal.  And equity salesforces still have an important position in the workflow, pitching the investment merits of the company at hand to first get a meeting and then an order from a long-only or hedge fund client.  Issuing stock is still a basically a specialized house-to-house search for appropriate owners, setting market expectations for near term performance, and getting the equity story out in a consistent and accurate manner.

At the same time, mistakes still happen in even the most well established business processes, as we have seen over the past week.  No need to “Name names” here, because it is not the point of this note to rewarm the leftovers of an already well-publicized failure.  Rather, as I watched the drama unfold in all its can’t-look-away-from-the-car-accident glory, it occurred to me that the wounds of the past week were somewhat self-inflicted.  There are rules to doing an Initial Public Offering.  By and large, investment banks follow these “Commandments” to the letter.  But when they don’t, well, that’s when someone loses an eye.

As I reminisced about the various transactions I witnessed during the 1990s, I started to jot down what I realized are the unwritten, but critical, rules to a successful public offering.  They apply reasonably well to both IPOs and secondaries.  And – conveniently – there are ten of them.

Our “Ten IPO Commandments” are as follows:

  • 1)      Create The Illusion of Scarcity.  The biggest challenge to a successful stock offering is to convince the base of buyers that there is much more demand than supply.  Raising the price range of an offering a good sign.  Increasing the number of shares is much more problematic and requires a “Measure twice, cut once” approach.  It is, after all, a signal that the sellers – who are almost always better informed than buyers – think the price of the offering is compellingly attractive versus their knowledge of the company and its prospects.
  • 2)      Maintain a Consistent and Improving Narrative about the Business.  For an IPO, there is a fairly long window between when you FedEx the initial documents to the Securities and Exchange Commission and the pricing of the deal.  Months, in fact.  Investors’ initial contact with the company comes when they read that initial filing.  From that point on, they want to see and hear an improving story about the business and its prospects.  If that means keeping expectations and commentary about the business modest at first, so be it.  Trajectory is everything.
  • 3)      Make Management Available To Investors.  Chairmen/women and Chief Executive Officers rarely achieve those positions without a healthy dose of self-esteem.  And they often bridle at being quizzed about their company by investors who know much less about the business than they do.  Fair enough, but it is part of the process and investment bankers need to deliver that message and get the most senior people to travel on the roadshow.  My most memorable experience with rocks-star management was Lee Iacocca, the former Chairman of Chrysler, and a bigger-than-life personality.  The key to making sure he was happy on the roadshow was to simply book the biggest hotel meeting space in all the major cities on the agenda.  We called him “Sinatra” and he enjoyed the nickname.  And he was happy to go anywhere and meet anyone after selling out the big rooms.  Investors appreciated that, and I believe they cut the company a lot more slack over time because they had seen Sinatra up close and personal.
  • 4)      Talk to your fellow underwriters.  The best capital markets officers I worked with always maintained an open dialog with their fellow lead and co-manager counterparts.  More information about how the market hears a story is always helpful.  And yet certain investment banks have a reputation for keeping things very close to vest.  Caveat emptor there.
  • 5)      Know Who is Buying.  “Building a book” is the tough part of any stock offering. How much is “Real” – legitimate orders from institutions who want to own the stock – and how much are “Flippers?” Sadly for many capital markets desks, buy-and-hold institutions now trade far less than faster-moving hedge funds.  As deals heat up, customers will try to leverage their importance to the day-to-day trading operation of the underwriters in return for better a allocation.
  • 6)      The IPO is Just the “First Date.”  Many companies think of the IPO as the end of a long journey, which may have started in a dorm room or a garage and ended by ringing a buzzer or a bell.  But for investors, that sound is the beginning of their involvement with the company.  No matter how great the business model or convincing the management team might be, the goal posts have shifted.  Bottom line – as a company, want your IPO to work on day one, week one, and month one.  It will pay dividends when you come back to the capital markets.  And, trust me, you’ll be back.
  • 7)      Know Who is Selling.  No matter how carefully constructed the deal book might be, some significant portion of the accounts will be sellers.  The underwriter needs to have a home for those shares (see Commandment #5).
  • 8)      Retail Is Different.  Most equity offerings allocate 20-30% of the deal to what investment banks call “Retail.” This term connotes individual investors, but can also mean smaller institutions.  If the business is consumer-focused, it will be at the higher end of the range, since these buyers are thought to be customers as well.  And retail is considered “Sticky” money, less likely to sell into any initial stock price pop.  The relationship, however, cuts both ways. A poorly executed IPO stands the chance to alienate customers and damage the company’s brand.  All of which means retail-heavy stock offerings need to be especially well run.
  • 9)      Bankers – Manage Your Client.  The best bankers I have worked with over my career had one thing in common: they established themselves as a financial expert with their clients and never let go of that position.  This is not an easy thing to do, but the reason bankers add value to the process of raising capital is not their ability to socialize or play golf or feign enthusiasm for a company in a pitch.  Their value is that they know more about the intersection of business analysis and capital markets than the clients they serve.  If the client comes to feel that they know more about the process than their bankers, and is allowed to act on that impulse, you can turn out the lights and head home.  The deal isn’t going to work.
  • 10)   Don’t be Afraid to Walk Away.  This applies to both buyers and bankers alike.  The stock market in the U.S. is open from 9:30am to 4:00pm every day.  If you are unsure about the deal, you can still buy it the next day, or the next week, or the next month.  The illusion of scarcity is just that.

And for my hustling banker friends, a story to close out this note…

The most stressful 24 hours of my professional career occurred when I found out a company I was working to take public had inadvertently hired a senior person with falsified credentials.  I took the information to the head of equities, a tough as nails West Point grad.  He immediately called the head of the firm and said the deal was off unless the individual with the fake resume was removed from the transaction.  This was a courageous move, for the deal was extremely high profile and we were the lead manager.  No one argued.  I never saw the fellow again.  I think he is a potato farmer somewhere. 

 

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Fri, 05/25/2012 - 09:46 | 2461972 lynnybee
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'How to be hated on FACEBOOK'  ...  well, no one even likes me on FACEBOOK anymore, just like in real life.    i started posting political articles, economic articles + my own commentary & all of a sudden ...... I HAVE NO FRIENDS !   

Fri, 05/25/2012 - 09:50 | 2461985 Colombian Gringo
Colombian Gringo's picture

Zuckerberg suckered investors, plan and simple. FB will eventually joint myspace as another idea whose time has passed.

Fri, 05/25/2012 - 09:54 | 2462007 Pladizow
Pladizow's picture

What are the 10 commandments for buying a bridge?

Fri, 05/25/2012 - 10:00 | 2462027 Harlequin001
Harlequin001's picture

Thou shalt not....

buy stocks in this market...

Fri, 05/25/2012 - 10:32 | 2462169 Carl Spackler
Carl Spackler's picture

# 2 - Timing is not everything, but it is darn sure close.

Fri, 05/25/2012 - 10:36 | 2462184 Harlequin001
Harlequin001's picture

that's what my ex girlfriend said...

it seemed important at the time...

Fri, 05/25/2012 - 11:05 | 2462342 Oh regional Indian
Oh regional Indian's picture

FB has to have been the biggest Sheep Shearing operation ever.

Now if I was running a social network and had 900 million users, I'd first go to them and say, hey, want to participate in this success?

Imagine what a virtuous cycle that would start. 

But companies are so used to thinking in old models while living in a new and ever newer world.

Dumb capitalism, bumber greed and dumbest Zucktards in the mix.

If done right, life can be good. And easy.

ori

want-to-save-the-world???

Fri, 05/25/2012 - 11:59 | 2462608 tocointhephrase
tocointhephrase's picture

THOU SHALT NOT STEAL (NOT EVEN Qe)

Fri, 05/25/2012 - 10:14 | 2462101 Joe The Plumber
Joe The Plumber's picture

Depends

Brooklyn or London?

Fri, 05/25/2012 - 10:26 | 2462150 Precious
Precious's picture

11.  Keep an extra doggie poop bag in your pocket.

Fri, 05/25/2012 - 13:29 | 2463022 piceridu
piceridu's picture

Resembles the 10 commandments for buying swamp land.

Fri, 05/25/2012 - 10:06 | 2462005 bigdumbnugly
bigdumbnugly's picture

then lynnybee:

thou shalt not covet thy neighbor's friendship requests

Fri, 05/25/2012 - 10:04 | 2462042 Parabolic
Parabolic's picture

Welcome to the Red Pill my friend...

Fri, 05/25/2012 - 10:10 | 2462076 Agent P
Agent P's picture

I refuse to be on FB, but the Mrs. is on there all the damn time.  From what I've seen looking at her page, if you're not posting brief, shallow, meaningless comments, you won't fit in.

Fri, 05/25/2012 - 10:23 | 2462137 Overfed
Overfed's picture

My (fairly well educated) wife does facebook, and it IS handy to keep in contact with spread out family and friends. I have noticed that if she does try to post anything meaningful, she gets barraged with "what are you, some kind of fanatic?" responses. I would have deleted my account years ago if I had one.

Fri, 05/25/2012 - 10:30 | 2462162 Joe The Plumber
Joe The Plumber's picture

Or trying to groom the missus. Watch out

For some of us the game of cuckoldry is the ultimate sport. And facebook is the main arena

An old boyfriend or girlfriend you never fucked from high school is the target. Watch her friends list for high school and old college friends. Conversation will be innocuous at first but the compliments toward the beauty wittiness and intelligence of your missus will flow freely.

Fri, 05/25/2012 - 10:40 | 2462199 Agent P
Agent P's picture

I'm well aware of this as several have made attempts to court the Mrs. already.  She has told me about them.  I trust her, and if she ever were to be unfaithful, I doubt I could stop it by reading her FB, so I don't go looking for it.  What I've seen of FB is what she's shown me, or what I've seen on the screen when I grab the laptop before clicking over to ZH.  

Fri, 05/25/2012 - 10:57 | 2462298 falak pema
falak pema's picture

agent Z, and laptop frolicks. I wonder if she looks at your wanderings on the screen. My wife has her own screen and Pad where she paddles up to her buddies as I like to write on my bigger book than her toe-pad. To each his own fantasies; mine being succulent things like bribing a word out of a mummy or driving a scream out of a dummy. Screams are a dream when you run out of drunken behaviour to fuel your own poetry of novel. Then you want to grovel for a phrase and pander for a gaze of hazel eyed wandering lust. Until you bite the dust, face and book first and second. Its nice to fall with wine on your lips and the forgotten word on your finger tips. 

Fri, 05/25/2012 - 10:46 | 2462222 New England Patriot
New England Patriot's picture

It's interesting that you bring this up here. I believe one of the real ten commandments touches on this subject.

Fri, 05/25/2012 - 13:08 | 2462395 JeffB
JeffB's picture

I just listened to a psychologist on the radio a couple of days or so ago discussing the rapidly increasing role of Facebook in divorces.

Here's a link to the audio. His "Manologue", near the beginning of his call in show, is devoted to Facebook and it's role:

http://avemariaradio.net/archiveListen.php?file=di_20120523

Much of that discussion was about a SmartMoney article:

Does Facebook Wreck Marriages?

...More than a third of divorce filings last year contained the word Facebook, according to a U.K. survey by Divorce Online, a  legal services firm. And over 80% of U.S. divorce attorneys say they’ve seen a rise in the number of cases using social networking, according to the American Academy of Matrimonial Lawyers. “I see Facebook issues breaking up marriages all the time,” says Gary Traystman, a divorce attorney in New London, Conn. Of the 15 cases he handles per year where computer history, texts and emails are admitted as evidence, 60% exclusively involve Facebook.

“Affairs happen with a lightning speed on Facebook,” says K. Jason Krafsky, who authored the book “Facebook and Your Marriage” with his wife Kelli. In the real world, he says, office romances and out-of-town trysts can take months or even years to develop. “On Facebook,” he says, “they happen in just a few clicks.” The social network is different from most social networks or dating sites in that it both re-connects old flames and allows people to “friend” someone they may only met once in passing. “It puts temptation in the path of people who would never in a million years risk having an affair,” he says. Facebook declined to comment.

 

Fri, 05/25/2012 - 10:15 | 2462107 Joe The Plumber
Joe The Plumber's picture

We love you, you phreak

Fri, 05/25/2012 - 19:47 | 2464045 Whiner
Whiner's picture

Yep. Some have to learn the hard way. Post pol-econ articles only as often as every 5th post. Intersperse with recipes, vacation pictures, animal clips, Idol favs, etc., thus building your readership. Then slip in your article with a teaser lead like,"Can you understand what the he'll this guy is saying...?" add a photo of a cake or animal or baby to your intro. After a year or two you may develop a circle of 2 or3 reader-posters of like mind... Maybe. You have to view it as long shot competition, because 97% of FB'ers are flip readers.

Fri, 05/25/2012 - 09:48 | 2461978 taniquetil
taniquetil's picture

Commandment 11:

Tell your muppe-I mean- clients, that "This time is different"

Fri, 05/25/2012 - 09:51 | 2461991 LULZBank
LULZBank's picture

Seems like a 10 step guide to running a ponzi.

Fri, 05/25/2012 - 09:51 | 2461993 smb12321
smb12321's picture

Here's what's pathetic - If the IPO had been wildly successful one of the Tylers would be blasting the sheeple who ran up the price, how phony it all was, etc.   It's all a matter of pre-determined perspectives.  FB will falter, flounder and eventually rebound due to its massive influence.   The real problem was the absurd initial price offering.  Lower it to $20 or so and it would have been quite successful.

Fri, 05/25/2012 - 10:01 | 2462030 Harlequin001
Harlequin001's picture

'FB will falter, flounder and eventually rebound due to its massive influence'

WTF...

Fri, 05/25/2012 - 10:02 | 2462039 LULZBank
LULZBank's picture

The real problem was the absurd initial price offering.  Lower it to $20 or so and it would have been quite successful.

That is what my Estate agent said to me, when I tried to sell my property at 2005s prices.

Fri, 05/25/2012 - 10:05 | 2462048 Harlequin001
Harlequin001's picture

you have a $20 house?

Fri, 05/25/2012 - 10:33 | 2462172 Harlequin001
Harlequin001's picture

what, and at only 113 quid?

Fuck it I'll have three.

Do I get any taxes with that?

Fri, 05/25/2012 - 10:57 | 2462292 LULZBank
LULZBank's picture

No taxes, but if you can keep possession (against the mafia etc) for long enough till the Turks have an Empire again ... You can make a killing!

Fri, 05/25/2012 - 11:10 | 2462364 Harlequin001
Harlequin001's picture

so, buy it, insure it, and wait for them to burn it down...

Cool...

Fri, 05/25/2012 - 10:24 | 2462141 francis_sawyer
francis_sawyer's picture

I'll offer you $5 for it right now... CASH MONEY!

Fri, 05/25/2012 - 10:37 | 2462176 Harlequin001
Harlequin001's picture

is that real paper CASH MONEY?

or have you got anything 'else' worth looking at?

Hey, just practicing...

Fri, 05/25/2012 - 13:11 | 2462952 The Alarmist
The Alarmist's picture

"The real problem was the absurd initial price offering.  Lower it to $20 or so and it would have been quite successful."

Would love to see your research and the valuation models you used to arrive at that "expert" conclusion. What? You pulled it out of the air? Shocking!

Fri, 05/25/2012 - 13:27 | 2463010 marriedgeordie
marriedgeordie's picture

doode, it's 100/1 PE (was last friday). come on.

Fri, 05/25/2012 - 09:52 | 2461996 Hopeless for Change
Hopeless for Change's picture

XI:  When you IPO at a price that assumes the best-case scenario for the next several years and the stock debuts for over 100x earnings when they start trading it... well, you should be able to guess what happens.  I mean, you're not stupid, right?

Fri, 05/25/2012 - 09:52 | 2461998 New England Patriot
New England Patriot's picture

Zuckerberg had a very successful IPO. People paid.

Fri, 05/25/2012 - 10:24 | 2462034 oldman
oldman's picture

What do you think the chances are of "clawback" on a deal where one seller wants to abandon the country of the deal and another is just a greedy bullshitter without allies? Who will win, the banks or the company?

I don't know, but politics runs the game----and it looks like the bad guys could have been all of the above

let me know what you think, please---the attorney's are swimming all around the bleeding corpse       om

Fri, 05/25/2012 - 10:14 | 2462097 connel20
connel20's picture

I agree with this 100%.  At the end of the day, MS got FB as much money from the IPO as possible.  How they did it (which will be reviewed in a court of "law") is questionable but they did the best they could for the company.  Pyschologically they didn't fair well because were led to believe their shares were worth $38 or $42 and now that they are down to $32 they are depressed, but in reality they are probably worth about $2 so they should be happy with anything above that.

Fri, 05/25/2012 - 10:20 | 2462123 Hopeless for Change
Hopeless for Change's picture

Suckerturd had a very successful IPO. Sheeple and muppets paid.  

-Fixed.

Fri, 05/25/2012 - 09:53 | 2461999 Agent P
Agent P's picture

The last paragraph is funny, because you can't be quite sure who got sent off to the potato farm, the guy with the false credentials or the head of equities who took a stand...my cynicism leads me to believe it was the latter.

Fri, 05/25/2012 - 10:11 | 2462084 Seize Mars
Seize Mars's picture

Agent P:

I think the potato farm is more honorable. After a few years of productivity, I would consider that guy to have been absolved. I would consider the "successful executives" to be continuing scumbags and worthy of disregard.

(By the way I hear Doofenschmirtz is on the Board at FB. You may want to check it out.)

Fri, 05/25/2012 - 10:25 | 2462145 Agent P
Agent P's picture

"Don't tell mom I'm an investment banker...she still thinks I play piano in a brothel."

Fri, 05/25/2012 - 09:53 | 2462001 BLOTTO
BLOTTO's picture

What happenned to last year IPO - lock stock of the year and sure thing - 'Groupon, Inc'

How are they doing?

Fri, 05/25/2012 - 09:54 | 2462006 slewie the pi-rat
slewie the pi-rat's picture

did anyone notice the lo-vol melt-up in the OJ pits the last coupla daze?

here are some stories from the OJ trials [Orange Juice Futures News Headlines] which have been fun for slewie:

Fri, 05/25/2012 - 10:53 | 2462277 TonyCoitus
TonyCoitus's picture

I prefer my OJ without pits.

Fri, 05/25/2012 - 10:08 | 2462047 Mercury
Mercury's picture

All true...but so 90's.

Today the zeroth commandment is:

Raise as much money as you possibly can in the private markets before dumping a slug of non-voting stock on the public who think they're buying the next DELL.

Fri, 05/25/2012 - 10:05 | 2462049 Seize Mars
Seize Mars's picture

Maybe I'm a bit jaded. When I see someone trying to sell me something at this point I think, "if it's so great, why is being offered to me?" The answer of course is, someone is offloading risk, or value, or something. I'm the last guy in the chain.

As the article author points out, it is possible that this process can be more or less "honest," but it still doesn't mean I want to be somebody's risk lay-off.

Sorry. Not for me.

The best investments I've ever made were things I thought of myself and executed myself, where everyone was trying to talk me out of.

Every single Wall-Street piece-of-paper official looking thoughtful and highly fancy investment I've ever made has lost money. Sorry Wall Street, I'm done with you, you're done with me.

Fri, 05/25/2012 - 10:06 | 2462053 Zero Govt
Zero Govt's picture

Facebook is actually a great social portal

what's killed it (its credability) is the corporate greed, the data-mining and flogging of user info and Goldman-greed in their bloated pricing

the greedy snake is eating its tail

Fri, 05/25/2012 - 10:10 | 2462075 Mercury
Mercury's picture

They don't have to mine for any data...you gave it to them for free.

Fri, 05/25/2012 - 10:22 | 2462133 mayhem_korner
mayhem_korner's picture

Facebook is actually a great social portal

 

Some othe great social portals...

Three Dollar Dewey's - Portland, ME

Bahi Hat Lounge - Sarasota, FL

Half Time - St. Paul, MN

Moe's - Charleston, SC

River Ranch - Tahoe, CA

Pat O'Briens - New Orleans, LA

Chez Paris - Montreal, PQ

Fri, 05/25/2012 - 21:04 | 2464206 Papasmurf
Papasmurf's picture

There's nothing great about a system that lets you thumbs up, but not thumbs down.

Fri, 05/25/2012 - 10:08 | 2462063 mayhem_korner
mayhem_korner's picture

 

 

Caveat emptor.

Rigor is a lost art of late, but in my mind has the highest return of any investment.

Fri, 05/25/2012 - 10:14 | 2462100 Fantasy Planet
Fantasy Planet's picture

11. Incl. Vaseline packets w/ statement and literature mailings. 

Fri, 05/25/2012 - 10:15 | 2462103 Davalicious
Davalicious's picture

Shylockberg & co. set up the IPO to make money, not friendship requests. He is a Jew. The Jew media went into overdrive promoting his web site, they bent over forwards selling his IPO. If you bought into his IPO you really need to be reading Zero Hedge, but are probably too fucking stupid to understand what is said.

Come on, 99% of us on ZH said that the Facebook IPO would be a scam. None of us here are surprised.

Fri, 05/25/2012 - 10:37 | 2462192 Thisson
Thisson's picture

Go stuff yourself, bigot.

Fri, 05/25/2012 - 11:53 | 2462572 Grinder74
Grinder74's picture

You gotta wonder, for all the people that complain about Jews getting favors, why don't they just become Jews themselves and take part in all the swag?

Fri, 05/25/2012 - 10:16 | 2462110 Floodmaster
Floodmaster's picture

Donna Kline  write some great articles on the Facebook scam.

http://www.donnaklinenow.com/

 

 

Fri, 05/25/2012 - 11:11 | 2462195 LouisDega
LouisDega's picture

Does Cecil B. Demille and Charlton Heston know about this?

Fri, 05/25/2012 - 11:04 | 2462336 adr
adr's picture

The real IPO Commandments:

1) Find an Ivy League jew with connections, and beat up his bully.

2) Find the latest business trend

3) Copy everyone else but add a twist, like Instagram but with porn stars

4) Forget about a business plan, your plan is to run an IPO con and cash out

5) Meet with Ivy League Jew's bankster dad's venture capital friends

6) Sign away inside shares to your investors

7) The investors get the stock market con system to hype your company

8) Some big company connected to the fraud apparatus makes a token investment by their standards, yet it values your "company" in the billions. Oh you can smell your sweet fortune.

9) IPO DAY!!!! You know it's a con, the underwriters know it's a con, but they know they'll make loads of cash and don't care.

10) Enjoy your windfall. You made it through the great con and got rich without doing any work or actually making a single dollar of true profit. Don't forget to thank your new Jewish friends. Of course now they are nowhere to be seen.

Fri, 05/25/2012 - 11:10 | 2462366 Stuck on Zero
Stuck on Zero's picture

My rules on IPOs ...  an IPO stinks if:

1) Less than 70% of the stock goes to the public.

2) The insiders are cashing out more than 10% of their stock

3) There are no selling restraints on the management or early investors

4) There are no performance constraints on management to vest.

5) There are no sales of any note

 

Most IPOs are rubbish.  Just quick gambling plays.

Fri, 05/25/2012 - 14:08 | 2463149 Bob Sacamano
Bob Sacamano's picture

An IPO stinks if.....you have less than $10 million (maybe less than $50 million) of liquid investable assets and are being offered shares in the deal. 

Folks, if it is a hot deal, most of you should not be getting any shares from the offering.  (And I am not complaining about such -- and no, I do not work for any financial related institutions).  

Fri, 05/25/2012 - 11:15 | 2462388 Budd aka Sidewinder
Budd aka Sidewinder's picture

Why would anyone trust a guy that fucked over his best friend and financier and the guys who gave him the idea and the only guy he trusted was a pederast and drug addict?

Now I'm wishing the Winkelvii would have beat the shit out of him.

Fri, 05/25/2012 - 11:14 | 2462389 foxenburg
foxenburg's picture

"The best bankers I have worked with over my career had one thing in common: they established themselves as a financial expert with their clients and never let go of that position."

 

I understand Bernie Madoff was especially good at this.

Fri, 05/25/2012 - 11:23 | 2462425 ZeroAvatar
ZeroAvatar's picture

There used to be Fifteen Commandments, but Conzine vaporized five of them whilst 'doing God's work'.

Fri, 05/25/2012 - 11:55 | 2462585 MrBoompi
MrBoompi's picture

Somebody should have told the public about the lower earnings and how this would (should) effect the price, in conjunction with all the additional shares which were created and sold.  Just because an activity is not prosecuted doesn't make it legal, but the SEC and the government will do nothing to prevent or prosecute fraud in this area.

The "market makers" are pissed off they're out $100mm.  But if you consider a $16 billion sale that dropped 20%, somebody's down a cool $3.2 billion.

ZH readers were warned about FB pricing long before the IPO.  I believe many of the small investors would have bought last Friday regardless of the news.  They thought the price would double and it would be easy money.  This is gambling and I don't feel sorry for them.  But I do feel for the investors who would have waited to buy if they had know about the reduced corporate earnings.

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