For anybody disappointed that they didn’t get their full initial allocation of stock, or who thinks that small retail investors can’t buy into IPOs at the same price that large institutional investors can, this is great news: Monday’s going to be a do-over, with everybody being able to buy Facebook stock at the IPO price.
This of course helps to point up just how silly all the Facebook IPO hype really was. Yes, Facebook is now a public company, but it’s still controlled by Mark Zuckerberg, and the IPO itself was a bit of a farce: delayed at the open, artificially supported by the underwriters at the close, and mainly serving to demonstrate that a brand-new company, which no one knows how to value, trading at a stratospheric valuation, can still somehow end up trading within an incredibly narrow range on enormous daily volume.
Why did Zynga’s stock drop when Facebook went public?
Zynga went through its own private flash crash. The straight drop and rise and drop in its stock after Facebook’s IPO is the classic signature of program trading. Whatever algorithms traders were using agreed that the stock was hugely overvalued, then undervalued, then overvalued again. So they all screamed “SELL” or “BUY” at the same time.
Then they stopped. Trading resumed at a more human pace. Why the change? One plausible explanation is that traders unloaded Zynga stock because now they could buy Facebook stock. They did so en masse — until Zynga stock fell so far that it became too cheap to resist. Then they bought it en masse — until Zynga stock rose so far that it became too expensive to resist dumping.
Underwriters prop up Facebook stock to prevent it from tanking on IPO day
On the left side, you see the “bids” that are in the market for the stock. Those are the offers to buy. On the right you see the “asks”, which are asking prices by sellers. Note that next to each bid or ask there’s a “size” which is the size of the offer to buy or sell. Note two things: At the top of the left column, you see lots of bids at $38.00 on various trading platforms. (The BATS exchange, Arca, etc.). What’s more, the size of those bids are HUGE. Hundreds of thousands of shares compared to relatively tiny asks and bids everywhere else.
Should be interesting to see if they’ll still be there to save $FB on Monday.
FACEBOOK IPO: The most important (not really) news event of all time - Felix TV for Reuters TV
An amendment that would legalize the use of propaganda on American audiences is being inserted into the latest defense authorization bill, BuzzFeed has learned.
The amendment would “strike the current ban on domestic dissemination” of propaganda material produced by the State Department and the Pentagon, according to the summary of the law at the House Rules Committee’s official website.
Hey you’re on our panel. #iwantmedia (Taken with Instagram at NYU 20 Cooper Sq)
Live coverage of the Facebook IPO
Facebook employees high-five each other before entering the company’s headquarters in Menlo Park before the company’s IPO launch, May 18, 2012. Facebook Inc, will begin trading on the Nasdaq market on Friday, with it’s initial public offering at $38 per share, valuing the world’s largest social network at more than $100 billion. REUTERS/ Beck Diefenbach
Source: reuters
The @reuters newsroom disco ball spins at half mast in honor of Donna Summer (Taken with instagram)
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