Facebook is obviously smart enough to think for the long term. I don't trust the financial machinery to do that.
These companies (most companies not just tech companies or just facebook) are largely black boxes to them.
They aren't thinking about how there are lots of hardworking people at them who deserve to be rewarded for their work.
I've been thinking a lot recently about this. How even myself I didn't really have a good perspective on how a company's stock price / ipo relates to them.
But with facebook its different though. I've known about facebook since I joined it in 2006 as a senior in high school.
And now I know people who work there. I even have a friend who works for Morgan Stanley.
So now im in a unique position to really understand where these numbers come from and the value they do or don't represent.
If you never learn that kind of stuff; either on your own, from others who have seen it, or don't have the benefit of the collective knowledge of a community like hacker news.
All you would have is:
"High stock price good, low stock price bad"
And the rabbit hole is actually much deeper than that.
Like in this instance even though the stock price didn't rise greatly it was actually good for the company. Because that's what an intial public offering is supposed to be about. A way for the company to raise capital. If the stock price doubles after that its all well and good but the company itself doesn't get to benefit from that aside from good press.
And I think a lot of people keep taking for granted that facebook is not public now because it wants to be but because it has to be, but thats a whole other conversation
People don't like the feeling of being sold something for more than it's worth. We call that being "ripped off," and most folks don't take too kindly to it. I believe you described this as getting a "fair amount."
People also don't like the folks who rip off other people. It's kind of a dick move to rip someone off. Those folks tend to do quite well, yes. That's FB in this case, who as you note made out just swell.
People especially resent it when those guys get incredibly wealthy by ripping off millions of people.
> Facebook is obviously smart enough to think for the long term. I don't trust the financial machinery to do that.
I think we can all agree - there's nobody we can trust more than Facebook to rip us off properly.
It still baffles me how anyone could think that this IPO was about anything but making vulgar amounts of money for Facebook.
I guess the label is now more accurate than ever: "...dumb fucks."
"The IPO produced the worst five-day return among the largest U.S. deals of the past decade."
That's an extremely qualified factoid. Please retitle this post.
Looks like Facebook avoided the problem and got the right price.
The losers for the most part were retail investors and various funds/traders who believed the banks that the IPO was correctly priced, and probably facebook employees who will have to sell at a lower price now because this botched IPO has sown a lot of distrust in facebook stock.
The goal for an IPO is to correctly price the offering. Usually tech stocks are wildly over-valued and speculated on when they IPO, that doesn't make the banks wrong for setting a reasonable price.
Shrug it's all bullshit anyway. When your talking in the scale of billions of dollars, capitalism can get pretty inefficient. Internet bubbles just highlight the most absurd parts of it. $1B for a 1 month project on iOS(instagram)? $100B for a monopoly on the social graph?(facebook) It makes no sense, but it's really just the tip of the iceberg when it comes to market inefficiencies and the huge amount of capital some companies have compared to the value they provide to society.
Then again, the SEC and practically all government agencies are revolving doors with big business so I wouldn't be surprised that all they get is a slap on the wrist.
"The IPO produced the worst five-day return among the largest U.S. deals of the past decade."
And then when three cherries don't come up on the first spin, man, are they pissed off.
It's important to gauge these things as they happen, so the next time around you get to be the one saying, "I've seen this before." These stories may all turn out to be moot, and in 10 years Facebook could be a huge brand, in which case you can look back and remember how Bloomberg labelled it the worst performing IPO of the decade. Or, it could go south....
I don't think facebook's IPO has any real bearing on the industry at hand. Other recent tech IPOs like LinkedIn and Jive have varied by more than 10% in the past week.
