Wednesday, May 23, 2012

The Faceplant Stock Conspiracy

People have a love-hate relationship with Facebook, which I refer to as "Faceplant".

Friends and family I know live their lives on Facebook, something I refuse to do. Now, I realize that the Dojo Rat Blog details aspects of my life, but these are just little tidbits of eternity. I don't get up in the morning and type in what kind of tea I am drinking. I don't complain about work on Facebook. I don't play farm or mobster games with strangers on Facebook. In fact, I can't remember the last time I checked the Dojo Rat page on Facebook at all.

People are willingly giving their lives over to researchers and advertisers by posting the most intimate details of their lives in a public forum, a dream come true for commercial marketing as well as Government snoops.
Lately I have noticed that I am being tracked on random websites just because Dojo Rat has a Facebook account.

That being said, there are some very valuable aspects of the "Facebook Revolutions".
The Arab Spring was organized on Facebook. Authoritarian countries like China try to block it's use in some cases. In a very real way, social networking like Facebook has allowed oppressed people all over the world to rally against "The Man".

So it was no surprise to see a controversy as Facebook released it's "initial public offering" or "IPO" for publicly traded stock.
Forbes explains the much-awaited IPO release:

"Shares of Facebook managed a slim gain from the IPO price of $38 when they debuted Friday, but then spent the next two sessions in free-fall. The stock finally righted itself Wednesday, climbing 4.5% to $32.40."

As IPO's go, this was quite a disappointment.
Naturally, wherever money is involved, lawsuits follow. According to the Forbes article:

"The defendants named in the suit include Facebook executives Mark Zuckerberg, CFO David Ebersman and Chief Accounting Officer David Spillane; board members Marc Andreessen, Erskine Bowles, Jim Breyer, Donald Graham, Reed Hastings and Peter Thiel; and underwriters Morgan Stanley, JPMorgan Chase, Goldman Sachs, Merrill Lynch and Barclays Capital."

Allegations cover whether the stock was knowingly overvalued or if investors were misled.

But here's an interesting angle;
I heard a very knowledgeable investor describe how the major financial networks played with Facebook in the lead-up to the IPO release. Financial networks like CNBC were slamming Facebook even before the release. It's like they just couldn't stand it and here's why:

The elites that puppet the country have no control over the most popular organizing tool in the world.

The damned thing was built in a college dorm room.
It didn't take any government money.
Wall Street doesn't control it.
Companies, organizations and even politicians have to use Facebook pages to be competitive in their field.

All this by some hoodie-wearing pot-smoking kids that don't give a shit about authority.
Zukerberg and his merry band of hackers have beat the system, and the system can't stand it.

So there is a possibility, nay probability that the elites have chosen to punish the outlaws, and from a report this morning on NPR the financial giant Morgan Stanley is being looked at very closely.
Remember, financial firms profit from "going short" on investment bets when stock prices go down also.

Now here's the kicker from the Forbes article:

"A separate lawsuit brought against Nasdaq OMX Group, alleges negligence on the part of the stock exchange operator, which delayed the initial trading in Facebook on Friday due to technical issues and then struggled to send execution confirmations notifying customers of completed trades for several hours."

So the stock exchange operators meddled with the IPO release. How much more direct can it get?

And now this, from the belly of "The Beast" itself, financial network CNBC:

"My heavens, who didn't conspire to deceive the public on Facebook [FB 31.90 0.90 (+2.9%)] First it was Nasdaq messing up the open. Then it was Morgan Stanley for not supporting the price, and upping the shares. Then, it was high frequency traders.
Now it's Morgan Stanley's technology analyst, who cut his revenue estimates on Facebook during the road show."

Years ago, I used to resent computer technology as a pending arm of "Big Brother" authoritarianism.
Then I realised that if anyone was prepared to stand up against a computer-driven "Big Brother" it would be the cyber-punks.

For all it's shortcomings and laying bare of public persona, the social network is a genie out of the bottle. The "powers-that-be" can't own or control it, it is a global people-powered super-entity and the elite are punishing it.


Drew said...

I now have a renewed (albeit a small amount) faith in Facebook as a social media giant.

Fou-mar said...

Don't bet on me ever using it...but i'm glad i have that option!

Toldain said...

Here's a different take:

Dojo Rat said...

A good article and perspective on the nuts and bolts of IPO's, Toldain.

But I think the real take-home lesson here is the market is clearly rigged against the small investor.

It's foolish for anyone to "dabble" in what is clearly a fixed game.

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