chassroc
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Rocks are abundant when you have rocktumblinghobby pals
Member since January 2005
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Post by chassroc on May 23, 2012 13:56:25 GMT -5
The recent Facebook IPO is another example of why we cannot trust this Industry to Police itself. Analysts at Morgan Stanley and Goldman Sachs changed their forecasts just before the IPO but did not widely share this with everyone. Allegedly the "Material Information" with the analysts opinions was published in an updated offering document but was "Selectively disclosed". Morgan Stanley claims the Facebook IPO followed the same procedures as other IPOs. That gives us a lot of confidence, doesn't it.
I'm not defending anyone who bought into the Facebook IPO or saying they were intentionally screwed, after all, for every overpriced IPO like Google that turns out ok, there are a larger number of "Facebooks" that tank. This one a little bit earlier than you would expect. It does seem that the analysts were pumping up the value of a company with limited revenues and uncertain prospects for raising more revenue, but then what in life is a sure thing, especially when it comes to investing. The analysts actions may not be wrong or criminal, but failure to disclose accurate earnings and revenue forecasts does seem fraudulent by my unobjective standards. In hindsight, it is obvious that this IPO should have been delayed at the very least to allow us to digest the reports that the analysts have disclosed.
With this little bruhaha and last weeks 2 billion dollar JP Morgan Chase trading southward trading adventure, is there anyone who wants to argue for less regulation?
charlie
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Post by helens on May 23, 2012 14:48:45 GMT -5
I knew this IPO was going to suck:). I bought into the Palm IPO and it was the same hype... ended up opening at $70, going up to $140 for about 1 minute and then dropped like a ROCK. Palm ended up by the end of the week at around $10. Talk about a lesson learned. This was at the peak of the internet bubble, and recent IPO's haven't been as crazy. But I knew to stay the heck away from this one.
Google was an exception. But you know, the pundits were warning about this IPO for weeks.
Bush removed a lot of regulations, and over the years, reducing funding for the SEC and other regulators have allowed the kind of excess that made Bain (Romney) rich, where in past years people like him went to prison (Michael Milken). Now the shorts control the street.
Less regulation will just crash the street and take out every single pension and retirement fund in the USA (since most are invested in baskets of stocks, bonds, funds and treasuries). For that reason alone, I think BOTH sides will fight tooth and nail to keep the minimum regulations... because if the actual retirements for every american gets wiped out, and not just noticed at the grocery store and gas pumps, it will actually lead to revolution.
I doubt any politician is that short-sighted, but you never know. Greed is king, and enough people want to vote for Romney despite public info about his 'business experience' coming from destroying other businesses and profiting from their losses. No other nation is going to let him in their treasuries, leaving only ours.
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Deleted
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Member since January 1970
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Post by Deleted on May 23, 2012 16:23:42 GMT -5
With this little bruhaha and last weeks 2 billion dollar JP Morgan Chase trading southward trading adventure, is there anyone who wants to argue for less regulation? Sadly, yes. The people who are making money in scams love the lack of oversight. But you knew that I recall this problem starting even earlier, with the first inklings coming with Carter's airline deregulation back in the late 1970's. During the 1980's, deregulation acquired the status of divine writ, and by the 1990's the process of dismantling and gutting the regulatory apparatus (not just in the financial system, but in consumer safety, spending oversight and a hundred other spheres) was well underway. Greenspan further shepherded a return to unregulated "the market knows best" chaos more in keeping with today's Russia or third world nations. They all should have known better, the history is there as to why unregulated markets fail spectacularly, and there is enough blame to spread around on both sides of the political aisle. What worries me is the huge amount of lobbying $ being spent in an attempt to roll back the very modest safeguards put into place after the 2008 crash (all in the name of "competitiveness"—I remember things being very competitive during the golden era of the 50's-70's, when things were much more regulated, and banks and business did just fine). Here we are less than 4 years after the 2008 meltdown, and we have Chase's Jamie Dimon now summoned to appear before a Congressional committe, whose members receive their biggest campaign contributions from… none other than JP Morgan Chase. We're sounding more and more like those "wonderful" days of the Robber Baron plutocracy during late 19th century. And still we have people thinking that is a good thing. Talk about "those who forget history are doomed to repeat it" -- it has been happening right before our eyes. Hopefully, both sides of the aisle can agree that one of the big problems with our situation is the influence that special interest money has grown to have in politics. THAT should be the issue candidates and voters are talking about. The nation's future is endangered unless the start made by the bipartisan McCain-Feingold bill of 2002 is reinstituted and greatly strengthened. Everyone, except the Supreme Court and special interest lobbyists, wanted that to succeed, and without it, all I see is more of the same pandering and deadlock.
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Post by helens on May 23, 2012 16:42:06 GMT -5
rocks2dust, very astute post. But the 'Corporations are people' guy is the candidate for President of the US. Something I think even Reagan could never have concieved of.
We live in interesting times.
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Sabre52
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Me and my gal, Rosie
Member since August 2005
Posts: 20,466
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Post by Sabre52 on May 23, 2012 16:43:01 GMT -5
Jeez, if folks would watch financial channels, they'd have known this was a offering that did not look good. Kind of a classic pump and dump. Pump it up and make it look good then all the folks in the know dump their shares while they are still high and get rich leaving late comer suckers holding the bag. Just goes to show that sucker born every day thingee. Heard on the business channel that smart folks are thinking of getting into it when t hits around $20. I'm still thinking about it but think not for me *L*......Mel
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Post by helens on May 23, 2012 16:43:24 GMT -5
not going to do my usual edit to correct the spelling error. 'i' before 'e' except after c... I saw that, hit send already.
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Post by helens on May 23, 2012 16:52:19 GMT -5
Well if you really want to play Facebook, the safer way to play it may be with Zynga. Zynga accounts for a good chunk of FB's potential profits, that's why I think google will have a hard time displacing FB as a 'social network'. Half the people on FB are game players with deep pockets and those games are ADDICTIVE. Plus, Zynga has taken a HUGE bath after their IPO earlier this year.
I got a bit into Zynga a bit early:(, but over time, I think it may be a better bet than FB because they're one of the sources of FB's income. ALTHOUGH... it's no bargain at a 5.2 billion market cap with no net profitability!! BUT... if Zynga were to move to Google... FB could be in deep trouble, so betting on the manufacturer seems smarter than betting on the retailer.
EDIT: not touching original note, but I shouldn't have mentioned this. I don't think anyone would buy any stocks based on a rock forum comment, but still. Right now is a bad time to get into stocks at all. I am only talking about something I bought that I'm pretty sure has not fallen to the bottom yet, and the price still has a ways to fall before turning around. NOT suggesting anyone buy this (or any) stock!!
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Post by helens on May 23, 2012 18:27:26 GMT -5
Wow... this is unrelated to the financials directly, but I just saw the most interesting video about the REASONS for Occupy Wall Street from one of the organizers. The first video is a Fox News interview with him (which apparently did not get aired), the 2nd video is astonishing. Impressive as hell: www.upworthy.com/i-wonder-why-fox-news-chose-not-to-air-this-footage?g=2
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Post by Rockoonz on May 23, 2012 19:50:06 GMT -5
IPO stands for "Is Probably Overpriced"
Lee
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chassroc
Cave Dweller
Rocks are abundant when you have rocktumblinghobby pals
Member since January 2005
Posts: 3,586
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Post by chassroc on May 24, 2012 11:22:59 GMT -5
Good call Mel..a sucker is born every minute...but I doubt it's is a deal at anything near $20/share.
In the end people have noone to blame but themselves for speculating on an overpriced IPO as Lee calls it.
People (naive investors...that probably includes most people) may not realize that Facebook at its original price of $38/share made its valuation 104Billion USD. That is a huge valuation but only 1/2 of Googles value so it may have seemed reasonable in some minds. I think 25% was sold to retail investors and a lot of those may have been just wanting to own a piece of something they use every day. Years ago the valuation of IPOs had more to do with earnings and less with potential; those days are gone as long as there are enough buyers willing to shell out 100 Billion on offers like this.
Charlie
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