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Monthly Archives: May 2012

“Put differently, [Facebook] basically pre-announced that its second quarter would fall short of analysts’ estimates. But the company only told the underwriter analysts about this.

The information about the estimate cut was then verbally conveyed to sophisticated institutional investors who were considering buying Facebook stock, but not to smaller investors

…. at best, this ‘selective disclosure’ of the estimate cut is grossly unfair to investors who bought Facebook stock on the IPO (or at any time since) and didn’t know about it.

At worst, it’s a violation of securities laws.” – BusinessInsider.com

Ummm, yeeeaaaah… I see this as a pretty big problem and completely shady.  When, “at best” the situation is “grossly unfair,” it doesn’t bode well, especially at your company’s much anticipated IPO.

More from Business Insider:

Earlier, we reported that the analysts at Facebook’s IPO underwriters had cut their estimates for the company in the middle of the IPO roadshow, a highly unusual and negative event.

What we didn’t know was why.  Now we know.  The analysts cut their estimates because a Facebook executive who knew the business was weak told them to.

The estimate cut appears to have influenced the investment decisions of at least some institutional investors, dampening their appetite for Facebook stock, and crucially, affecting the price at which they were willing to buy Facebook stock… Analysts cutting estimates is generally regarded as significant negative news for stocks. This is especially the case when the analysts who cut their estimates are very close to a company—and, therefore, are thought to have particularly good information…

The SEC and FINRA appear to have acknowledged this, and they may now investigate what happenedMore broadly, everyone is still trying to understand what happened with the pricing of the IPO, which was hyped up to be the offering of the century.  We now have some more information on that.

Given the PR and legal disaster that the Facebook IPO is rapidly becoming, most official communications channels have gone silent. Facebook declined to comment. Morgan Stanley did not return a call and email seeking comment…

… it seemed, someone had directed the analysts to cut their estimates—most likely someone with inside knowledge of how Facebook’s Q2 was progressing.  And we have now heard from one source that that is what happened.  One of the underwriter’s analysts has said he was told by a Facebook financial executive to cut his estimates.” – Henry Blodget at BusinessInsider.com

READ FULL ARTICLE AT BUSINESSINSIDER.COM

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Here comes news about the Facebook IPO that buyers should be outraged about and goes to prove that bankers simply don’t give a rip about ethics, rules, regulations, etc… it is literally all about manipulation at every level necessary to get cash.

Reuters Alistair Barr is reporting that Facebook’s lead underwriters, Morgan Stanley (MS), JP Morgan (JPM), and Goldman Sachs (GS) all cut their earnings forecasts for the company in the middle of the IPO roadshow.

This by itself is highly unusual (I’ve never seen it during 20 years in and around the tech IPO business).

But, just as important, news of the estimate cut was passed on only to a handful of big investor clients, not everyone else who was considering an investment in Facebook.

THIS IS A HUGE PROBLEM, for one big reason:

  • Selective dissemination. Earnings forecasts are material information, especially when they are prepared by analysts who have had privileged access to company management. As lead underwriters on the IPO, these analysts would have had much better information about the company than anyone else. So the fact that these analysts suddenly all cut their earnings forecasts at the same time, during the roadshow, and then this information was not passed on to the broader public, is a huge problem.

Any investor considering an investment in Facebook would consider an estimate cut from the underwriters’ analysts ‘material information.’

What’s more, it’s likely that news of these estimate cuts dampened interest in the IPO among those who heard about them. (Reuters reported exactly this–that some institutions were ‘freaked out’ by the estimate cuts, as anyone would have been.)

In other words, during the marketing of the Facebook IPO, investors who did not hear about these underwriter estimate cuts were placed at a meaningful and unfair information disadvantage. They did not know what a lot of other investors knew, and they suffered for it.

Selective dissemination of this sort could be a direct violation of securities laws. Irrespective of its legality, it is also grossly unfair. The SEC should investigate this immediately.

We first heard rumblings about this last week, and we were so startled that we assumed the reports were wrong. Then, over the weekend, when Reuters reported the basic story again, we said that if it was true, Facebook IPO buyers deserved to be ‘mad as hell’ about it. And now Reuters has the details, and they sound as bad as we had feared.” – Henry Blodget at the Daily Ticker

Read Full Article from the Daily Ticker Here

Let’s be real now people.  Is Facebook really worth $100 billion dollars?  Weigh in please.

“General Motors Co. plans to stop advertising on Facebook after the company’s marketing executives determined their paid ads had little impact on consumers, people familiar with the matter said, a move that comes as more companies question the effectiveness of advertising on the social networking site.

The largest U.S. auto maker will continue to expand its use of marketing through Facebook’s pages, in which markers can display content at no cost, these people said.

The news comes at a bad time for Facebook Inc. The Menlo Park-based social network is expected to hold a historic initial public offering on Friday.” – Wall Street Journal

READ ARTICLE HERE

“Three high-ranking officers are expected to leave J.P. Morgan Chase & Co. this week, said people familiar with the situation, in the latest fallout from a trading blunder that has cost the bank at least $2 billion.

Those leaving are Ina Drew, who since 2005 has run the risk-management unit that is responsible for the losses; Achilles Macris, who is in charge of the London-based desk that placed the trades; and trader Javier Martin-Artajo, a managing director on Mr. Macris’ team, the people said.” – WSJ.COM

“More than three years after the financial industry almost collapsed, the colossal misfire was cited as proof that big banks still do not understand the threats posed by their own speculation.

‘It just shows they can’t manage risk — and if JPMorgan can’t, no one can,’ Simon Johnson, the former chief economist for the International Monetary Fund, said Friday.

JPMorgan is the largest bank in the United States and was the only major bank to remain profitable during the 2008 financial crisis. That lent credibility to its tough-talking CEO, Jamie Dimon, as he opposed stricter regulation in the aftermath.

But Dimon’s contention that the $2 billion loss came from a hedging strategy that backfired, not an opportunistic bet with the bank’s own money, faced doubt on Friday, if not outright ridicule.

‘This is not a hedge,’ said Sen. Carl Levin, D-Mich., chair of a subcommittee that investigated the crisis. He said the trades were instead a ‘major bet’ on the direction of the economy, as published reports suggested.” – FOXNEWS.COM

 

Peoples!  This is a truly inspiring story and you absolutely must watch the video.  It is moving to say the least!

Not even a year ago, Richard ‘Steelo’ Vazquez couldn’t walk or talk.

Celebrity break dancer “Steelo” is best known for his spins, breaks and slides on “Dancing With the Stars.”  The 32-year-old father was suffered a brain aneurysm, and has now made his way back to the stage.  He was one of 6 million people who suffer from aneurysms every year. Forty percent of them die.

After a grueling dance practice last June, Steelo came home with a severe headache and was vomiting.  Thinking he only had a tweaked muscle, he didn’t immediately go to the doctor.  At church later that weekend, on Father’s Day, Steelo suffered an aneurysm.

Emergency brain surgery saved his life, but four additional ruptures took away Steelo’s ability to speak, walk and dance.  During months of excruciating rehabilitation, Steelo never gave up hope that he could recover and return to the dance floor.

You can follow Steelo’s amazing comeback at www.steelo444.com” – KTLA.com

WATCH THE VIDEO HERE