On top of what you saying, if people can get waivers from DOJ or Treasury, people can print themselves load of money, and congress can't do a thing about it. what are you going to do?
The whole point of the stock market is to raise money for owners of business to cash out and allow the wall street first to take a good size chunk of the ipo. Then the market existed for wall street firms to make money off the public and allow the owners to cash out more with a secondary IPO. If the public can make money off the stock market... it is purely an accident and will be rectified by the SEC, exchange rules and market rules. It was front running, spreads and commissions, now it is co located servers and hft. Someday it will be something else. So the point being, if you can't beat them, join them.
What the crap? The "whole point" wasn't a giant exit strategy for the founders... Sure, in this case FB pretty much used it as such.. but the stock market is more widely used (if there ever was a 'point') to raise capital by selling ownership for business growth purposes.
Facebook options start trading May 29 at the CBOE. Someone should cause a print at 37.99 on an away market, or when there are "fast market" conditions that allow print-throughs, or utilize any useful information from the AAPL-BATS print-throughs. Any print under 38 will signal a breakdown in the artificial price support syndicate and cause a cascade of selling. Load up on SPX puts beforehand because the public is involved with Facebook like nothing else, and wider market effects will follow. Loading up on Facebook puts would be even better if the syndicate can just hold out until May 29.
I was exaggerating to make a point about the game being set up for wall street not the public... but if you have a profitable business which you are going to continue to put an effort into and you continue to believe will be growing and profitable... are you rally going to choose to dilute and share profits with wall street bankers and deal with the accounting and regulatory nightmares. Yes it can be a good way to retain employees.... but, it is usually a cash out or exit for the founders. It is more interesting when non profitable companies go public to raise money. But we have not seen much of that since the 90s.
Also, TechCrunch says Morgan Stanley is on the hook for the most money in supporting Facebook. Morgan Stanley owns 2 billion dollars worth of Facebook shares. Buy Morgan Stanley puts, or watch for pressure in Morgan Stanley shares. They are vulnerable right now, and will be tempted to buy even more to protect their position. Everyone will know what pressure on Morgan Stanley means in this coming week of trading.
But the green shoe left them with a 60 million plus covered short. That over allotment allows them to buy in the market without getting killed. I'm not suggesting those running the book are happy but I doubt they are yet underwater for significant sums. and I suspect they do not have the intention of going "big number" out of pocket. This deal was too big and too aggressively priced in a cooling, jittery market but I suspect the bankers are not buried. They have all had egg on there face before.
Interesting comment. I noticed extremely large bids on the Level II when it dropped intraday to the offer price of $38, bids in the MILLIONS of shares per exchange, it was truly insane. The following quote is from the Greenshoe definition on Wiki, which is very telling: "The SEC currently does not require that underwriters publicly report their short positions nor short-covering transactions. Investors who are unwary of underwriter stabilizing activity who choose to invest in what they perceive to be a stable issue can encounter volatility when the underwriters pause or complete any stabilizing activity." Once the street begins coverage and the analysts start providing forward earnings estimates, it could easily encounter a "cascade of selling" as you mention should it not hold the $38 offer price. Of course, it could also shoot up and stay up, who knows. I did take it for a quick scalp, to me it's just another symbol to trade.