Morgan Stanley and FB

Who woulda thought?

major ethics violation >.>

Come on, it’s a rigged casino.

Why can’t we just put that disclaimer on this and stop pretending that the markets abide by rules and regulations.

The retail investor needs to be told straight up, “You have no business here, unless you are ok with losing.”

people should pay $38 for an IPO because they’ve calculated the fundamentals and know the stock is worth that, not because they think they’re going to be able to sell it for $48 when it starts trading

pigs get slaughtered

I don’t see a problem with this. If IPO goes down…doesn’t that mean MS got the best price? In the primary market, you’re a counterparty to the offering firm, they can’t be looking out in your best interests…

One thing I know with certainty after passing the CFA exams, watching the market daily for six years and researching hundreds of stocks is that any asset is only worth what other people will pay for it. That’s it. You can calculate any fundamental value you want, but the price someone is actually willing to pay to buy it off you is the only thing that matters when you try to sell it. Morgan Stanley did exactly their job – they maximized the price for their big client (you can argue the people they placed the stock with were their clients as well, but those clients are small and can be replaced, so they don’t hold the big stick in this transaction). Unless it can be proven that the filing documents were fraudulent based on inaccurate information in the disclosures, everyone needs to get their panties untwisted and move on. Unless fraud is shown, MS did absolutely nothing wrong. Is it unethical? Sure. But what have ethics ever had to do with the stock market? This is capitalism people, let’s be honest with ourselves.

Okay, THIS, if true, would be egregious. I’ve been saying for a long time that the global settlement is kaput, and this would seem to prove that (if true).

I totally agree. And I would extend that to many assets out in the real world.

It’s the only logical reason why people will spend $150M on a painting, or $2000 an ounce on gold

Yeah, there was something in the CFA Code of Ethics about this kind of thing. And yes, that’s an understatement.

nothing wrong with this at all…there are some guys even on here who was looking to get into FB…if you couldn’t decipher the problem than too bad…nobody made you want it…

Yeah, the facebook IPO was like KimK. It was kind of hot in that trashy way (HTB – you heard it here first), and you knew it was overpriced and that you were probably going to get raked over the coals, but some poor schmoe(s) still weren’t able to help themselves when given the opportunity to inject capital (or something else). Don’t be like Kris Humphries, you’re better than that.

The issue (as described in bromion’s link) is that MS allegedly shared material non-public information with some investors but not others. Price subjectivity is not really the cause of this controversy.

I think there are multiple controveries. The controversy really started on Monday when the stock was down (which was its own controversy because people felt bilked). The material non-public info has just come to light (to my knowledge at least) – that is a real issue, but everything else is just crying over spilled milk.

bottom line is, somebody (anybody who bought the IPO) lost money and now are crying over it…

The morning of the IPO there was a discussion on one of the NPR stations about how it would take only the bravest investors to short FB. My initial reaction was that I certainly see myself doing that if I was a stock investor. FB is crap. The IPO was very well publicized, and that makes me think, “what kind of company would need all that kind of publicity for any product or service?” Empty barrels really make the most noise, remember Tax Masters?

I’ve never had anything to do with trading so I don’t know the regulatory issues if there are any with the FB IPO.

Regardless, MS’s job is to make as much money as they can for themselves and their client. And they did.

Their job isn’t to price the IPO 40% low so it opens 40% higher.

Maybe I’m just cynical but how could anyone who wasn’t an insider expect to make any money on this stock trading at 80x earnings (not a question).

blake is right…

Ahmen. MS’s job is not to underprice the IPO so everyone can jump in on the gravy train. I haven’t looked at the fundamentals, but initially, I have a hard time getting excited about this stock.

The issue here is the alleged insider trading, not the price of the stock.

Yes, and that’s what I was referring to in my post above, based on my reading of Bromion’s link.

If the story is true, then a few analysts were in possession of “material non-public information”. Any Level 1 candidate, much less a charterholder, should have read that phrase a few dozen or hundred times. Heck, I took Level 3 four years ago and that phrase is still printed on my brain. Someone correct me if I’m wrong, but wasn’t the CFA’s recommendation for the analyst in possession of such material non-public information to encourage the company to make it public? I think that’s how it went.

Anyway, yet another example of the CFA theory not meeting reality.