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That facebook IPO in full [Stoat]
I’m not the first to say the obvious, but the FT appears to have misunderstood the world:
Some investors accused Facebook of taking advantage of enormous demand to sell at an inflated price
it says, commenting on the way FB’s shareprice dropped from $38-ish to $34-ish. To which the answer is… WTF do you think FB is, a charity? If you’re overwhelmed by people desperate to hand over cash in exchange for your shares, then of course you raise the price.
Back in the dotcom bubble era it was fashionable to IPO at well below what you hoped the shares would trade up to. But, that was a bad thing, not a good one. Not just because the companies weren’t getting their money’s worth, but more because it was a sign of bubbliness and, effectively, dishonesty: people who knew (not me, I hasten to add; I fell for the hype too; I was much younger then), knew the kind of valuations being posed were meaningless, and they knew that no-one knew how to value them, and they knew that the best guarantee of the shares going up, was for the shares to go up, because people had no other measure of value than a relative one.
[BTW, we're very close to the great switch-over to WP, this post may oscillate, who knows...]
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