Mark Zuckerberg's Big Facebook Mistake 418
Hugh Pickens writes "Nathan Vardi writes in Forbes that in the last two months, Mark Zuckerberg has had a rude introduction to the capital markets. With Facebook's stock in free-fall, down more than 40% from its IPO price, Zuckerberg has a big problem. 'Zuckerberg did not want to deal with the pressures of being a public company. Like many entrepreneurs these days he viewed the capital markets with suspicion,' writes Vardi. 'So Zuckerberg made a fateful decision, he decided to keep Facebook a privately-held company for much longer than other success stories like Google or Amazon.' But waiting eight years to conduct an IPO has turned out to be an impossible problem to manage. The bankers at Morgan Stanley applied all the lessons of the last 15 years and priced the IPO at $38, which was very aggressive, in an attempt to avoid leaving any money on the table and the embarrassment that a huge IPO pop would represent. With such a big valuation at IPO time, Facebook had to show some results. But the numbers that Facebook announced in its first quarterly earnings report were underwhelming and the trading hordes drove Facebook's stock down by 15% in Friday morning trading. Now the early institutional investors are heading for the exits and it's hard to imagine morale at Facebook won't take a hit that correlates with the loss in value of the shares belonging to the employees. 'The lesson of the Facebook fiasco for Silicon Valley is clear. Start-up entrepreneurs cannot evade the discipline of the capital markets any more than can the prime ministers of Spain and Italy.'"
Shame on Morgan Stanley (Score:3, Funny)
Wall Street greed strikes again. I'm just glad that I wasn't stupid enough to invest. My off-the-cuff valuation would have been somewhere around $5/share.
Re:Reality bites (Score:5, Funny)
Couldn't have happened to a nicer guy.
"the discipline of the capital markets" (Score:4, Funny)
Hahahahahahahahahaha oh. You were serious. Right after saying:
The bankers at Morgan Stanley applied all the lessons of the last 15 years and priced the IPO at $38, which was very aggressive, in an attempt to avoid leaving any money on the table and the embarrassment that a huge IPO pop would represent.
That sounds like a huge amount of discipline.
Re:Reality bites (Score:3, Funny)
TL;DR
Lessons of the past 15 years (Score:5, Funny)
Lesson 2: Investors are so stupid they still believe banks after the toxic mortgages fiasco in which they were lied to morning and night.
Lesson 3: Investors are so stupid they believe a fashion business in a volatile industry is worth sackloads of money.
Lesson 4: Nobody ever missed a bonus through screwing investors.
Yup, looks like they applied all the lessons.
Slashdot confirms: Facebook is dying (Score:4, Funny)
Yet another crippling bombshell hit the already beleaguered Facebook community today when Slashdot (who heard it from Hugh Pickens, who heard it from Nathan Vardi, who heard it at Forbes, which is a sensational money magazine) announced that Facebook is dying. The rate on superpokes is plummeting, and as for Farmville cows, you can't even _give_ them away...
Re:Reality bites (Score:2, Funny)
No. He sold 30 million of the 533 million he held. He sold less than 6% of his stock.
And he still made a shit tone (yes that is a metric shit tone) of money off of the 6%.
I think you mean tonne. A metric shit tone is measured in hertz.
Re:Reality bites (Score:5, Funny)
Look, I'm no true oldtimer, but *everyone* knows the term is "slashdotter".
Unless you're a Scandinavian daughter of the lead guitarist from Guns-N-Roses, in which case you're a Slashdottir, but that's kind of beside the point.
Re:Reality bites (Score:5, Funny)
Is there a fluid shit tone? I ate a garbage plate loaded up with Frank's the other day, and I definitely shit a tone. Musta been a Db, or if you play by feel it was a D#, but either way, it sure hertz.
Re:Reality bites (Score:5, Funny)
"discipline of the capital markets.."