22 May 2012 - Facebook IPO

Tremble in fear! Facebook’s newly issued stock is not leaping upward! This can only mean that the initial price was as high as it could be, so that Facebook collected as much money as it could. And that is a major deviation from form for the investment banks that handle IPO’s. They try to underprice the offering so that the first buyers, the bank’s cronies and friends, can turn a buck at the expense of the new public company, whose officers are then making a slightly smaller killing. Tremble in fear! Facebook is as powerful as an investment bank!