The Facebook IPO stories:

  1. Facebook has raised $16 billion in “record” offering. Link: And it starts trading today. They sold at the top end of the range ($38 a share), which is crazy. 421.2 million shares. That values the company at $104.2 billion. But, I suppose, even though I think that price is unjustifiably high (and I really don’t have a justifiable reason for feeling that way – apart from “gut feel”*) – market sentiment doesn’t really have such a strong hold on fundamentals. The euphemistic phrasing for this is “the banks feel that there is a lot of retail interest”. The price gives FB a market value half that of Google. And, interestingly, if you take the market value as a multiple of sales, FB is more expensive than every single company listed in the S&P 500. And all this for a company that’s losing out on its Advertising Revenues because we’re all logging on via our cellphones. Eyebrow raised. 
  2. US-deserter, Singapore-resident, Facebook-co-founder Eduardo Severin will still pay “hundreds of millions of dollars” in taxes to the US Government. Link: Because that’s how you finance a deficit. That’s what he says. In a shameless display of vote-mongering, many legislators are getting hyped and trying to impose more taxes on people surrendering their US citizenship if it seems that they’re doing so only to escape taxes – but Eduardo gave his citizenship up, like, eight months ago. Doesn’t it feel a little late to be leaping on him specifically? One particular senator, Charles Schumer, is trying to get a new bill passed that (obviously) imposes higher taxes, but also a permanent barring from the US for the rich kids leaving. His quote: “Eduardo Severins wants to de-friend the United States of America just to avoid paying taxes. We aren’t going to let him get away with it.” Guy? I think he already has. How are you going to make him subject to a law that you haven’t passed yet and that definitely won’t have existed at the time of him leaving? 
  3. Facebook trading to test a rule. Link: The Volatility Trap Avoidance Clause. The idea is to avoid the volatility that generally accompanies the launch of a share with no previous trading history. And, well, general embarrassment for NASDAQ if it all goes pear because the “Retail Interest” (see 1. above) second and third guesses itself before trading begins. The rule is: no buy orders to be accepted before trading begins. Mostly because these are “buy at the lowest possible price” orders. What is the lowest possible price if the share hasn’t traded? Chaotic, is what.
  4. Goldman Sachs and its funds sell nearly half their facebook stock. Link: Raising $1 billion in the process. It sounds like a hedge, doesn’t it? If the share price goes up, they make on the half that’s left, and don’t lose of the half they sold. If the share price goes down, they don’t lose on the half they sold, and lose on the half they kept. But the fact that they’re selling almost half the investment – doesn’t really bode well for future increases, eh?
Conclusion: Bitches be crazy.

*Which is really a redundant way of saying “my justification for feeling that way is because I feel that way”. Disclaimer – I gave it.