facebook fraud ipo fail: dislike!
Facebooks Wall Street investment banks warned top clients of new doubts about the social networks financial prospects just days before the companys IPO, according to a series of reports that emerged Tuesday. After receiving briefings from Facebook executives, analysts at the banks lowered their financial forecasts for big institutional clients, some of whom scaled back plans to buy Facebook stock, even as the banks raised the IPO price and number of shares amid a frenzy of hype.
Although Facebook had publicly disclosed mobile advertising challenges, the new revelations raised questions about whether Facebooks underwriters selectively disclosed information that gave favored clients an unfair advantage over other investors. The revelations, which came as Facebook shares plunged nearly 9% Tuesday, drew immediate scrutiny from federal regulators as well as a subpoena from Massachusetts officials. Meanwhile, the Nasdaq stock exchange faced a growing chorus of anger and a class action lawsuit over its botched handling of the IPO, which has already become the worst-performing three-day start for an offering over $1 billion in the last five years.
Facebooks highly-vaunted IPO which was supposed to be a shining moment for the social network, as well as its lead banker Morgan Stanley and the Nasdaq exchange has morphed into a debacle thats reinforced some of the worst stereotypes about Wall Street: that corporate executives and their bankers engineer IPOs to maximize profits at the publics expense; that Wall Streets own systems have become too complex for its personnel to handle; and that the entire game is a hype-fueled casino, rigged for the house with a sucker played by the average investor.
Wall Street institutins got the dealio and we regular peeps got the shaft again...at the hands of Wall Street. Of course, short selling makes it all ok...for Morgan Stanley and the like.
The vampire squid on the face of humanity (paraphrased from Matt Taibbi).