Facebook IPO plunge sparks tidal wave of lawsuits

Re: Rules of investing

That would be covered by rule #4 - do your own research! I'm sure a quick Google would have turned up articles here and other sites questioning the valuation of FB.

Re: Rules of investing

So... If I understand correctly, the professional gamblers didn't do a good enough job trying to "Beat the system"?

Re: Rules of investing

I personally believe Facebook is way overvalued but that doesn't mean that Facebook or their underwriters can say X about their books and the reality is actually Y or that investors have no legitimate grievance to sue somebody over when the truth emerges. It is clear here that there were issues about how the IPO was managed which meant it was not conducted in a way which was fair or transparent.

Re: Rules of investing

Shares are held on average for 20 seconds, the share price of a company does not represent its value. Stock markets are casions for high frequency traders, they are not for average people to invest in. If you are thinking about buying shares in a company and holding on to them in the hope of making money then you are an idiot, end of. Governments are aware of this, they have let the public sit back and take it for years.

Re: Rules of investing

I also upvoted Andyf (#13; don't work on Wall Street and do belong to the 99%). Nothing in the post is pro-fraud and the rules given are common-sense that all security investors should internalize and follow. Also:

5. if it isn't clear how the company will make profits, avoid it.

Gamblers who bought in at $38+ anticipating a quick 10% - 20% gain on the post-IPO bump will have to wait, maybe for a long time. Most of the money here was from high-stakes gamblers or institutional investors. The gamblers may need to seek help with their problem, although a lawyer would not be the appropriate professional. Institutional investors may need to be reminded of their fiduciary duty, and their customers might want to engage lawyers for that.

Re: Rules of investing

Re-read my post please, specifically the 2nd paragraph - "so unless there's some malpractice uncovered in the way the IPO was handled" etc... and actually take the time to understand it.

I'm not 'profraud', as someone else commented, far from it. If there has been some shifty business in the way the stock has been valued and investors have been misled, then I think they have reason to complain. If not, then they need to be pointing fingers at the nearest mirror.

Re: Good move

"Actually - market has only been open for 25 minutes and the stock is already 2.42% up on it's opening price and increasing."

Yes, but each day so far has opened with a little rise on the day before where big players try various tricks agreed overnight to try and shore it up. And then it begins to sink. I predicted <$30 by the end of the month. I'm kind of alarmed to think I may actually have been wrong about that. It hit $31.02 yesterday and news of this lawsuit will NOT help.

People can follow the rollercoaster here:

http://uk.finance.yahoo.com/echarts?s=FB#symbol=fb;range=5d;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;

Re: Stock and shares are naturally risky.

My point was that the investors bought into the hype fed to them from Morgan Stanley without researching the facts on their own merit and got burned as a result.

I'm no stock market investor by any means but if even I as a layman can work out the company is overvalued and its price is going to tank after it floats (and most media reported it would do so as well) then those investors are certainly not smart enough to play the market.

I agree that the company should report accurate data to all investors and while that should be punished and enforced to ensure it doesn't happen again, but investors shouldn't expect their money back when they choose to make a bad decision.

Re: Stock and shares are naturally risky.

Wrong! Those shares are not yet available to short.

Re: AnonymousNow

Morgan Stanley produced a valuation report based upon PUBLIC information distributed by FB in their revised IPO prospectus.

Since this report was based upon information available to everybody, Morgan Stanley has the right to distribute the report to as few or as many people and/or institutions they wish to.

You might think it unethical or immoral, especially since they were also underwriting the IPO, but it was not illegal and it was not fraud.