What a mess. There is much to talk about, but there will be plenty of time to evaluate and watch this Facebook circus play out. I want to make one simple argument at this point in time. Apparently, a lot of big boys got burned on this IPO in addition to the retail investor, while some other big boys made the most of the situation and earned some pretty good coin despite the disappointing IPO as I pointed out in previous posts. (I am editing this post this morning to add this article that came out today which is very good Who really won in Facebook IPO Mess? There are a few points amiss in the article, such as the premise that Zuckerberg “just wants to make the world more connected” as opposed to “monetizing” his users to make billions and I don’t think the author realizes that some big boys got burned in this IPO that weren’t as connected as some of the bigger boys.
But, in my opinion, it is only because some big boys got burned do we hear murmurings about legal action and investigations into the IPO (LA Times, Fox News). Why I ask, weren’t there investigations when LinkedIn and Yelp experienced incredible first day pops enabling the big boys to flip their stocks and make a killing? Isn’t a huge first day pop and then fall just as suspect as a first day flop and then decline? I find it laughable that only now, because some big boys lost their ass, is there any type of review momentum or concern with the IPO process. But wait, didn’t our government with support of the House, the Senate, the President, and both Democratic and Republican parties, just pass a bill (IPO Deregulation Bill) that actually further deregulates the IPO process? When are our leaders going to take action to regulate this out of control industry?
The further one digs into how IPO’s work and how they enrich the insiders and well-connected at the expense of the retail investor (you and I) and the citizens of countries all throughout the world, the more one understands how corruption can become legalized through the lobby arms. I have a hunch the big boys that got burned will use their power and wealth via the legal system to get reimbursed and maybe, just maybe, for once, some of those lowly retail investors might also get a little trickle down.