Facebook's horrendous debut
This deal ultimately will go down as one of the worst-executed IPOs ever. Given all its problems, this stock is a sell, sell, sell.
What the heck happened with the Facebook (FB) deal? In the old days, you would have had to canvas the customers one by one in order to find out, and you wouldn't be able to reach enough people to really know.
These days, it's very different. I have more than 500,000 followers on Twitter, and I'm being deluged with people who didn't get their orders filled, still don't know what they have and aren't sure if they are long or short.
This deal, when the smoke clears, will go down as one of the worst-executed initial public offerings we have ever seen.
Now, I am sure that all of the companies involved will (1) disclaim any problems (2) find a way to say it was the best offering ever and (3) say that, given the demand and the volume, it was handled extremely well.
Here's the issue, though: All of these people who are complaining can't be wrong. They didn't all make it up, and they aren't all griping jerks. Should we just ignore them?
Look, someone blew the opening. Someone didn't have control over the deal. Someone was negligent. We just need to know what happened here.
You see, with these Twitter comments, I am not pointing fingers. The people are. The people can no longer be ignored just because they are little, or not JPMorgan Chase (JPM), or because they are rich private clients of Goldman Sachs (GS). Someone must answer to these people.
But you know what? I am so jaded and cynical these days that I figure no one will. The process is hard enough, and the regulators are not sophisticated enough to do anything other than say, "Hey, it went pretty smoothly."
They will get away with that, because the press doesn't have subpoena power.
Now, on the deal itself, and why it was so sloppy, here's what I am hearing. Regardless of what the brokers were saying about demand, it was not tight at all. Regardless of what Facebook told Morgan Stanley (MS), which amounted to something like "Let the real people have it," the real people didn't expect it -- that, or they didn't want it nearly as much as the Facebook gazillionaires thought they did.
There were plenty of brokers who couldn't fill the supply, not the demand. That's why I was so adamant on "Meet the Press" (video) that you need to be a seller. It was that, as well as the fact that all of these social media deals are busts, and the ones that don't stay at a premium to the deal are real busts.
In other words, given the lack of demand on the opening day, given the lack of faith and the anger that the IPO process engendered, and given the fact that Facebook is now just one more stock caught up in the fiasco that is Greece and the coming tragedy that is Spain, the stock is a sell, sell, sell.
Do you think any one of these underwriters can recommend it up here, given the metrics and the worries -- yes worries -- about the next quarter?
I don't think so.
Jim Cramer is a co-founder of TheStreet and contributes daily
market commentary to the financial news network's sites. Follow
his trades for Action Alerts PLUS, which Cramer co-manages as a charitable trust, and is long JPM.
There are just too many unknown risks with FB to justify its IPO valuation. The foremost being hoardes of privacy suits that could be waiting in the wings.
It should have started off as a penny stock and worked its way up.
Social Media is a self indulgent ego-stroke joke. Those who have fragile egos and nothing material to contribute can suddenly feel important and feel that they belong - after all, look at how many friends they have, so they must be important!
Companies will drop the "social media aspect" of their business, hiring requirements, etc as soon as social media is discovered for what it is - theft of personal information that is then used to "shill" some product or service. Theft of personal information so an "employer" can see if you are going to be a problem, a boat-rocker, or someone completely at odds with how they "think" the world and a good employee should be. Theft of personal information to generate money from the least important aspects of humanity - mundane, personal uniqueness and opinions.
Social media is the bane (Bain?) of a happy existence.
cramer blows with the wind. one day for facebook the next against. What is it with this guy? And he has the nerve to question Warren Buffet? He is nothing but a daytrader, an unsuccessful one at that. Real easy to call it a flop Cramer the day after.
It wasn't a huge disaster and its not a huge buying opportunity. somewhere in the middle is more accurate and daytrader Cramer has to sensationalize to get more clicks.
Too Much! Too Late! Facebook is on it's way down and everyone knows it, Why buy into it?
FB has hit its peak and is spiraling down. There's a reason why it went public.
This all happened for one reason. Facebook is for all intensive purposes at it's peak. They knew it it was overhyped, overpriced, and too many shares were available for profitable trading. Inside traders knew it and the general public obviously knows it. Facebook have already maximized thier potential for exploiting personal information for profit, and pop culture is well into it's beginning to despise them for it. The only way I would buy into FB is if the Chinese Communist regime (who have outlawed Facebook, Twitter, and many others) is on the brink of being overthrown. In that case, I would invest every dollar into every major social networking and information site available. Otherwise, I'm looking for the next big thing.
The big boys had their hand in the cookie jam and couldn't get it out.
They can lose their money just like everyone else.
The big boys will get their money back by taking their bonuses for their bad management.
FB is just another MySpace BS that is totally useless and bares no value at all. It will go away once nobody is giving FB any ad money (who looks at these ads anyway? They are just a nuisance!) and people using FB need to pay to be a member.
Who ever bought FB stock is holding the short stick. Greed is going to get you, especially the little 'investors'! JPM will lose their a$$ here, go for them. But if they fail the taxpayer will be forced to rescue them...
The way FB has treated its subscribers---
- the I-don't-give-a-crap attitude of its CEO toward the IPO
- the renouncement of citizenship by a co-founder ungrateful to what the U.S. free market allowed him to do (and could have lived a thousand lifetimes of opulence even with the U.S. tax burden)
All should be red flags to anyone who has a nickel to invest.
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