Facebook’s Failure May Be Part of Government Plan

[EmptyTimCup]

hopefully Tilted will chine in on the financial aspect of Facebook IPO

Beck: Facebook’s Failure May Be Part of Government Plan to Control Internet



Was Facebook systematically overvalued in order to force it into a government bailout?

That’s the hypothesis that Glenn Beck offered on GBTV tonight, and like many of Beck’s hypotheses, you might be surprised at the evidence that exists for it. In a nearly 20 minute segment, Beck meticulously and carefully picked his way through the past record of the company that handled the IPO for Facebook – Morgan Stanley – and pointed out that they don’t exactly have a record of success in helping companies go public.

“Morgan Stanley was the lead consultant on Fannie and Freddie bailouts,” Beck said in the segment. “They also set the IPO for General Motor. Whoa.”

The evidence from that point continued to mount, all to support Beck’s contention that the administration wanted Facebook to fail. Why? So that it could be brought into the orbit of the government as one of many formerly powerful companies that had to take money in exchange for loyalty. Beck suggested that the reason the government would want this is because control over Facebook via public money would enable them to have huge amounts of control over the internet, which they would then use to stifle dissent.

 

[Tilted]

I haven't heard much of what Mr. Beck has had to say since he went off the air at Fox News Channel. Frankly, based on having heard him occasionally there, I wouldn't go to the trouble of looking for him to listen to him now. I'll leave my comments about him in general at that (well, almost).

But this notion that he's apparently floating with regard to Facebook is beyond ridiculous - it's over the top even based on what I remember of his antics / performances. Does he not know how an IPO works? In so far as Facebook is concerned, how was this IPO a failure? How was Morgan Stanley not successful in raising the maximum amount of funds possible for Facebook and Facebook's prior owners? From a PR perspective, Mr. Zuckerberg might not be thrilled with how things played out (and I suspect he'll eventually comment on it and/or doing something as a sign of good will toward investors). But, as the immediate drop in the share price suggests, the road show and Morgan Stanley (as well as the other underwriters) got a very good price for the Facebook shares - more than it seems they should have been able to get.

Further, whether Facebook considers the IPO a success or not, how would the overvaluing of Facebook (for the IPO price) force it into a government bailout? It would have the opposite effect - make a bailout less likely (though Facebook is not even remotely in need of a bailout to begin with). It means that Facebook has more money to burn, not less. The people that took a financial hit are the ones that overpaid for the stock and then sold. Mr. Beck's suggestion flies in the face of logic and common sense and, frankly, makes him seem as though he needs medication. (Though I'm gonna go back on what I said in the first paragraph and say that I don't think he's actually delusional, I suspect he just thinks this is the best shtick he's still got available to him.)

 

[Pete]

Beck has jumped the shark on this one.

 

[Larry Gude]

I haven't heard much of what Mr. Beck has had to say since he went off the air at Fox News Channel. Frankly, based on having heard him occasionally there, I wouldn't go to the trouble of looking for him to listen to him now. I'll leave my comments about him in general at that (well, almost).

But this notion that he's apparently floating with regard to Facebook is beyond ridiculous - it's over the top even based on what I remember of his antics / performances. Does he not know how an IPO works? In so far as Facebook is concerned, how was this IPO a failure? How was Morgan Stanley not successful in raising the maximum amount of funds possible for Facebook and Facebook's prior owners? From a PR perspective, Mr. Zuckerberg might not be thrilled with how things played out (and I suspect he'll eventually comment on it and/or doing something as a sign of good will toward investors). But, as the immediate drop in the share price suggests, the road show and Morgan Stanley (as well as the other underwriters) got a very good price for the Facebook shares - more than it seems they should have been able to get.

Further, whether Facebook considers the IPO a success or not, how would the overvaluing of Facebook (for the IPO price) force it into a government bailout? It would have the opposite effect - make a bailout less likely (though Facebook is not even remotely in need of a bailout to begin with). It means that Facebook has more money to burn, not less. The people that took a financial hit are the ones that overpaid for the stock and then sold. Mr. Beck's suggestion flies in the face of logic and common sense and, frankly, makes him seem as though he needs medication. (Though I'm gonna go back on what I said in the first paragraph and say that I don't think he's actually delusional, I suspect he just thinks this is the best shtick he's still got available to him.)

I am looking forward to your comments on why GM took such an enormous shot at FB so last minute.

 

[Tilted]

I am looking forward to your comments on why GM took such an enormous shot at FB so last minute.

The timing stuck me as coincidence. It certainly didn't hurt Facebook with regard to the success (from Facebook's standpoint) of the initial offering. Facebook got $38 / share for its new stock - the top of the suggested range which, itself, had been revised upward just a few days prior.

Companies announce things all the time that go largely unnoticed. Had the timing not coincided with the IPO, this announcement by GM would likely have gone unnoticed by most people. The mainstream press chose to talk about it because of the IPO (I suppose), which made it seem connected. From talking to friends, it seems to me that it got more mainstream coverage than the $1 Billion Instagram acquisition (by Facebook) did - and the later, I would think, should have been a much bigger story, especially considering some of its details. It's kinda a modified tail wagging the dog situation with regard to press coverage.

 

[Larry Gude]

The timing stuck me as coincidence. It certainly didn't hurt Facebook with regard to the success (from Facebook's standpoint) of the initial offering. Facebook got $38 / share for its new stock - the top of the suggested range which, itself, had been revised upward just a few days prior.

Companies announce things all the time that go largely unnoticed. Had the timing not coincided with the IPO, this announcement by GM would likely have gone unnoticed by most people. The mainstream press chose to talk about it because of the IPO (I suppose), which made it seem connected. From talking to friends, it seems to me that it got more mainstream coverage than the $1 Billion Instagram acquisition (by Facebook) did - and the later, I would think, should have been a much bigger story, especially considering some of its details. It's kinda a modified tail wagging the dog situation with regard to press coverage.

I see. So, based on your comments, you are, obviously, part of the conspiracy...

I'm sorry. GM had to hurt. I'd guess a lot when a major client dumps on you on the eve of your IPO "They don't work for us very well. We're pulling out."

Come on. :shrug:

 

[Tilted]

I see. So, based on your comments, you are, obviously, part of the conspiracy...

I'm sorry. GM had to hurt. I'd guess a lot when a major client dumps on you on the eve of your IPO "They don't work for us very well. We're pulling out."

Come on. :shrug:

It hurt the price of the stock after it started trading (though I don't think a lot - there were more impactful dynamics playing out). But Facebook (and the existing owners) got $38 / share, the GM announcement didn't change that - that's what I referred to and what matters with regard to the conspiracy theory at hand.

 

[Larry Gude]

It hurt the price of the stock after it started trading (though I don't think a lot - there were more impactful dynamics playing out). But Facebook (and the existing owners) got $38 / share, the GM announcement didn't change that - that's what I referred to and what matters with regard to the conspiracy theory at hand.

Man. You are in deep. They did, perhaps, stop it from going to, say, 45 or even 100 or maybe $1,000

Maybe you can't putt because of a guilty, compromised conscience?

 

[b23hqb]

Man. You are in deep. They did, perhaps, stop it from going to, say, 45 or even 100 or maybe $1,000

Maybe you can't putt because of a guilty, compromised conscience?

Could that be what happened to Eldrick Tont Woods as well?

 

[somdfunguy]

Man. You are in deep. They did, perhaps, stop it from going to, say, 45 or even 100 or maybe $1,000

Maybe you can't putt because of a guilty, compromised conscience?

going to 45 or higher doesn't matter. FB was only getting $38 a share (it does for shares not sold but not IPO shares.) The big brokers would make more money if it went higher but FB gets $38.

 

[Larry Gude]

Could that be what happened to Eldrick Tont Woods as well?

Yup. Once he got caught, everything went to crap.

 

[b23hqb]

Yup. Once he got caught, everything went to crap.

Not much worse than busting a G string when you are wailing and whomping upon it.......

 

[Larry Gude]

Not much worse than busting a G string when you are wailing and whomping upon it.......

This no longer happens to me. For one thing, my Strats are incapable of breaking strings and, for the other, on my Paul, I took to the Zakk Wylde method of reversing the strings back through the tail piece and THEN up and over. I used to break strings all the time. This is a tip that truly, totally lives up to it's billing.

 

[Tilted]

Man. You are in deep. They did, perhaps, stop it from going to, say, 45 or even 100 or maybe $1,000

Maybe you can't putt because of a guilty, compromised conscience?

As I said, yes, that announcement from GM may have affected the price after trading began (though, again, I don't think it affected it much - there was a lot of other stuff going on).

But I referred to what Facebook got - the IPO price - not what happened in trading afterwards. Looking back now, it seems like the IPO was priced to perfection from FB's standpoint - they got as much as they possibly could. And, no, that IPO price wasn't going to $45 or $100 or $1,000 (i.e. had this GM announcement not come) - it couldn't have, that would have violated SEC rules.

As for a guilty conscience (I know you were joking, but...), I think it would affect my full swing much more than my putting. Outside thoughts don't creep in when I'm setting up for a putt, but they often do when I'm setting up for full swings - so much so that I had to develop a method of harnessing them rather than being distracted by them. That said, I have no idea why I would have a guilty conscience about the Facebook situation. I don't own any, I didn't recommend anyone else buy any, and I didn't make out like a bandit like the people that owned it beforehand (and sold at $38) did.

 

[Larry Gude]

As for a guilty conscience (I know you were joking, but...), I think it would affect my full swing much more than my putting. Outside thoughts don't creep in when I'm setting up for a putt, but they often do when I'm setting up for full swings - so much so that I had to develop a method of harnessing them rather than being distracted by them.

It's a fascinating game, that's for sure.