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4 posts • Page 1 of 1
Ahhahahahahaa... Zuckers got zucked by the man himself. The foolishness amazes. People should've known this guy and the whole fb ipo scam.
The anger surrounding the sharp decline in the value of Facebook shares deepened yesterday when investors who have lost millions discovered that its founder apparently saved more than £110m by selling early.
Mark Zuckerberg, the social network's founder, sold shares in the company worth £720m on Friday, the day it floated on New York's Nasdaq stock market. But the price plummeted soon afterwards, from the $38 a share (£23.95) at which Mr Zuckerberg sold his stock. The price difference meant Mr Zuckerberg saved £111m by getting out early.
Read More: Mark Zuckerberg saved $111m by selling Facebook shares before stock slumped
Looks like Zuckerberg's gain is equal to Wall Srteet's loss...
Facebook market makers' losses total at least $100 million
May 25, 2012
By Jessica Toonkel and John McCrank
(Reuters) - Claims by four of Wall Street's main market makers against Nasdaq over Facebook's botched IPO are likely to exceed $100 million, as they and other traders continue to deal with thousands of problems with customer orders.
A technical glitch delayed the social networking company's market debut by 30 minutes on Friday and many client orders were delayed, giving some investors and traders significant losses as the stock price dropped. The exchange operator is facing lawsuits from investors and threats of legal action from brokers.
Four of the top market makers in the Facebook IPO -- Knight Capital, Citadel Securities, UBS AG and Citi's Automated Trading Desk -- collectively have probably lost more than $100 million from problems arising from the deal, said a senior executive at one of the firms.
Knight and Citadel are each claiming losses of $30 million to $35 million, potentially overwhelming a $13 million fund the exchange set up to deal with potential claims.
Nasdaq also has to contend with the outside prospect that it could lose the Facebook listing entirely after having just obtained it.
More on this insanity.
Shares continue to slump on Wall Street as lawsuits against founder Mark Zuckerberg allege company misled investors.
Facebook's shares dipped below $30 Tuesday as the company's shares hit new lows and continued to struggle in the wake of its massive initial public offering (IPO).
Even as US stock markets bounced back from falls last week, Facebook's shares slumped 9.62% to end the day at $28.84 – almost $10 below the $38 price set at their IPO earlier this month. Stock markets in the US, which had been closed on Monday for Memorial Day, ended up for the day.
The share slide means Facebook is now valued at $61.98bn, a sharp fall from the $104bn it was valued at when the company went public on 18 May.
The IPO has proved a disaster for Facebook and its bankers. US authorities are investigating allegations that the company gave critical information to some investors and not others. Shareholders have launched class action lawsuits against founder Mark Zuckerberg, the company and its bankers, including lead bank Morgan Stanley.
Walter Zimmermann, senior technical analyst at United-ICAP, said there was plenty of evidence that the stock could fall further. He said the share sale had represented "a mania of historic proportions".
"This was an IPO that was going to save California and uplift the western world. It was so overhyped and overvalued that it could only fall," he said.
Some traders pointed to technical reasons for the stock's continuing woes. Trading in Facebook options – contracts that allow investors to make bets on the direction of a company's shares – started Tuesday. Traders can now also "short" Facebook shares, betting that the price will fall.
Sam Hamadeh, founder of analyst PrivCo, said most of the options were "bearish" meaning traders were betting on price falls and that popular contracts were putting Facebook's share price in the mid $20s for June and July. PrivCo estimated Facebook's shares were worth $25 ahead of the IPO.
"The shares would have probably fallen anyway but this probably sped the process up a little bit," he said.
Zimmerman said discussions of technical issues missed a wider point. He said Facebook had sold so many shares – 96m – that there was little appetite from investors who had not bought shares. "Who is left to buy?" he said.
News that the company is considering building its own mobile device, an area where it has struggled to make money, seems to have been shrugged off by investors.
Full Story: Facebook shares fall below $30 as US authorities begin investigation into IPO
Looks like the Facebook IPO bit Mark Zuckerberg where it hurts most. It'll be interesting to see where this levels off...
Mark Zuckerberg, Facebook's co-founder and chief executive officer, is no longer one of the world's 40 richest people.
The 28-year-old's fortune fell to $14.7 billion Tuesday from $16.2 billion on May 25 as shares of the world's largest social-networking company dropped 9.6% to $28.84. That extended the stock's losses to 24% from the worst-performing large initial public offering of the past decade.
"It seems to be a clear reflection that there was just too much stock issued, that the valuation was aggressive and that a lot of people who lined up to buy it really had no intention of holding it," Jack Ablin, the chief investment officer of BMO Harris Private Bank in Chicago, said in a telephone interview. The bank oversees about $60 billion of assets.
Facebook shares closed at $38.23 on May 18, the first day they began trading, giving Zuckerberg a net worth of $19.4 billion. The company ended the day with a price-earnings ratio of 83.1, making it more expensive than 99% of Standard & Poor's 500 Index stocks. The company went public as the equity index was heading for its biggest monthly decline since September.
Facebook options trading began Tuesday, with volume for puts exceeding calls by 1.2 to 1, data compiled by Bloomberg show. More than 200,000 puts were traded, giving the holder the right to sell the shares at a specified price. June $30 puts were the most active contracts, with volume at 23,835. They were followed by June $34 calls and June $32 calls, which carry the right to buy the shares.
Zuckerberg is now $800 million behind Luis Carlos Sarmiento, who ranks 40th, with a fortune of $15.5 billion on the Bloomberg Billionaires Index, a daily ranking of the world's wealthiest people.
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