Last week, one of my Wallstreet buddies alerted me to the possibility of the Facebook IPO as being illegal stock manipulation. As the week has gone on, more and more reports have raised questions. If you are following this story like me, it is all over the place.
Forbes has put together a good article for the laymen to understand the art of valuation. Like most things in life, it involves “math.” There is a formula that is used to predict revenue. The benchmark most are using is Google. Yet, Facebook is NOT Google. It is a Social Media site. There are more than enough examples of social media services that have come and gone. Let’s see, remember “My Space” anyone?
Henry Blodget at Business Insider has put together a comprehensive accounting of the questionable practices of Facebook and Morgan Stanely. In a nutshell, they helped all their buddies, but left the little investor out of the inside information. As I say to my relatives, if you don’t have the truth, how can you make informed decisions. In the case of the “Muppets” as they are called by Wallstreet insiders, they don’t count.
While Mark Zuckerberg is getting married and becoming a billionaire, others are claiming losses of $100 million dollars. The brokers on behalf of their “Muppets” are starting to fight back. This could get messy.
More to come on this topic for sure.
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