I'm sick and tired of these banks screwing over the little guy.

JPMorgan Chase, Goldman Sachs, these companies truly represent the epitome of corporate greed and corruption in america.

Why would any sane person buy into an IPO of a company with a PE valuation of 100:1? I do not even feel sorry for these suckers/gamblers.

That said, a stock is like anything else. people will pay what they think it is worth. If they don't think it is worth it, they should not pay!

I could bid $100/share for FB right now and I would find lots of people willing to sell it to me at that price. If I feel it is worth that much, I shouldn't complain later when I find out someone would have sold it to me for only $10/share.

It's a lot like salary. If I accept an offer to work for $100K/year, I do so believing that is a fair value for what I offer, and I should feel good about it. If I later find out that my neighbor in the next cube offer, who has the same qualifications and start date that I do, managed to negotiate for $200K/year, I shouldn't complain. I'm still getting what I agreed to, and what I agreed was a fair price.

Bottom line - lots of people are just bitching because they didn't get rich quick, for doing nothing, like they thought they would. Too bad for them.

*Somebody* was a naughty little corporation, and didn't pay enough in "campaign contributions", lobbying , and political favors, hmm?

Let their example send a warning to you others out there that think you can just go around doing business without us getting our "vig", like it was a free country and open & fair marketplace or something!

Strat

They need to take a look at the Instagram deal:
http://www.bbc.co.uk/news/technology-17658264

The deal was Facebook buys Instagram for mostly FB shares. The pair of them talked about the deal being worth $1 billion, and it was nuts. Buying an app with so few user for $1 billion made no sense. The real game here was that Instagram would PRETEND that it really was a $1billion deal and thus the shares were worth that much.

It's a trick similar to a mock auction, where a third party accomplice pretends the things being sold are of high value while knowing they are low value to create an inflated perception of value. There's been a lot of these dog IPOs lately. SEC seems to be turning a blind eye to them, and letting investors get ripped off. IMHO SEC will just whitewash this one too.

Actually, MS came out with a statement indicating that the all IPO members (both retail and institutional investors) received updated guidance during the roadshow via a revision to the S1, and that the pricing of the IPO included that guidance. The analyst opinion was simply reflective of the revised guidance.

You'd have to be pretty stupid to assume that analysts wouldn't revise their opinions based on the change in guidance.

Well, you'd have to be pretty stupid to participate in the IPO in the first place, let alone invest in the stock. The thing was overpriced, the talking heads said it was overpriced, a simple high school math calculation would tell you it was overpriced, most people KNEW it was overpriced... and bought it anyway hoping for another 'sure bet' circa the internet frenzy leading up to the internet crash circa ~2000.

In some respects this is a good thing, it brings a much needed dose of reality to fuzzy-brained armchair investors.

If you want to complain about something you can complain about the NASDAQ screwing up the opening and not providing trade confirmations for 3+ hours to investors whos money was locked up and who could only watch the price start to drop without knowing whether they even owned shares, or being able to sell.

-Matt

How could you, in about 80 comments now, miss the great Zuckerberg quote: "Dumbfucks, they trust me!"?

You say that the information didn't come out to every one but nevertheless there was plenty written over the last few weeks saying that Facebook was overvalued. There was no shortage of warning signs so it is hard to feel sympathy for those who lost money on this. Caveat Emptor and all that.

I am curious how many 'little guys' actually managed to secure shares in the offering. I would say nil.

The underwriters decide who will receive shares in an IPO and this is done via an application/bid process meaning that friends and large clients of the bank are given priority. It would be a little suspect if all these shares were not issued to funds and the extremely wealthy.

In short, don't fret. This is the 1% fucking with the 1%. I approve of this.

Nobody will disagree with you here.

You don't have to pay any income tax at all - there are plenty of places that don't charge it. Go live on the Cayman islands and make your fortune there - I don't think they have any income tax or capital gains tax, so you can keep 100% of your money!

Of course it's a bit more difficult to make your money without an educated workforce, or lots of infrastructure, or developed labour and financial laws, or trade connections, or any of the other things that government provides for business. But who needs any of that? People who make money make it entirely through their own effort and talent and don't owe one iota of a debt to the government.

On the other hand if you want to make use of the advantages that government spending provides in order to make your fortune it behoves you to pay the tax that finances that spending.

No-one's taking anything from you - it wasn't yours to keep in the first place.

Yeah you tell yourself that the next time someone steals your car. It wasn't yours to begin with. You were merely holding it for the thief.

An excellent response, the situation is 100% analogous.

I was born in a thief-provided hospital, educated at a thief-endowed school and the villains even gave me money for college and I'm sure the same goes for most of us.

I find any ideological opposition to regulation curious.

Are you aware that the current crash came after a period of deregulation of the financial industry comparable only to what happened before 1923?

I recommend that you to read a book called "This Time is Different: Eight Centuries of Financial Folly" - you'll find not only that the current crisis is nothing new, but also that all the greatest banking crisis happened following phases of banking deregulation, just like this one. In fact the credit bubble that resulted in the current crisis started when the Glass-Steagal regulation was repealed.

Think of banking regulation like the economic equivalent of regulating an industry that deals in explosives - the side effects of a fireworks factory exploding right in the middle of a residential neighbourhood are so bad that the industry has severe restrictions about where and how they setup their business.

In your no-regulation world, how would you avoid that a fireworks factory is setup right next to your house (or maybe a nice nuclear waste treatment plant)?