I understand the Facebook IPO came off something less than flawlessly, but could live without the post-deal squawking, just the same. From USA Today.
Stacy Harris, 60, a newsletter editor in Nashville, . . . got her hands on Facebook shares at the offering price in search of riches but ended up with a small paper loss. Her experience left her “disappointed” in the IPO process. She got 500 shares at $38 from her broker at Smith Barney . . .
She says she, too, wanted to “make a quick profit.” Her plan was to flip 400 shares on the first day of trading, which she did at a profit, despite not getting quick confirmation of the trades due to glitches. She held the other 100 shares for the long term. She made around $800 on the shares she sold, but is down $840 on the shares she kept.
Not quite the killing she envisioned, especially given that for once she got her hands on IPO shares before they started trading, just like the big investors do. “The upsetting part is, supposedly I had the edge,” says Harris.
She thought she had an edge? Really? It’s almost enough to make you glad the company booted the quarter. Even by the standards of whiz-bang tech IPOs, Facebook is an exceptionally high-priced bundle of fluff. No one seems to be quite sure how to value the company, what its business model should be, or even if the business is viable long-term. Nor does management seem especially committed to looking out for shareholders. So, yes, things can go wrong. And yet USA Today doesn’t seem to have any trouble finding one retail investor after another who thinks they were somehow taken advantage of on the deal. Message from real world: you weren’t. Even long-term investing carries its share of material risk. (Trust me on this.) It should come as no surprise that do-it-yourself IPO flipping can be a money-loser, too. In the meantime a little less whining would seem to be in order.
What do you think? Let me know!