Yesterday before heading up to school in the morning, I read yet another news article about Facebook’s fall from IPO grace. Those who paid around $38 per share for a company whose stock should have been priced at around $10, are reeling. The company has lost $19 billion in market value already and they’re likely going to lose more. What to do, what to do? Blame, investigate, file suit. Surely the folks at Facebook withheld vital information that those small investment firms should have been privy to, otherwise why would they pay that $38? Let’s see… hmm…I don’t know…because they pretend to know what they’re doing but in fact, are actually a bunch of greedy idiots?
Oh, don’t get me started. This stuff makes me crazy.
I don’t have the energy to break it down, but I’ll remind you that I’m just a writer mom from the ‘burbs and I knew Facebook’s stock was overvalued. I’d heard the concerns about lower advertising revenue because so many people use Facebook on their teeny, tiny mobile devices, which don’t display as many ads. I’m pretty sure if I asked the homeless man up at 7-11, he would have told you Facebook’s shares were overpriced. Whatever. Now ‘small’ investors are scrambling.
From Reuters: “With Facebook shares all but impossible to sell short, investors have sought out almost any related vehicle to bet against the social network. Over the past three trading days, prices plunged on two closed-end funds that owned pre-IPO shares. Firsthand Technology Value Fund and GSV Capital Corp both dropped more than 25 percent even though their Facebook holdings make up only a small fraction of assets.”
In other words, Las Vegas. It’s gambling, plain and simple. Nothing is being produced. No jobs created.
Later, up at my daughters’ school, I listened as more than a dozen children, fifth- through seventh-graders, pitched themselves in an effort to become part of next year’s student council. They made promises, they told jokes, they smiled and attempted to convince their possible future constituents why they were worthy of the job. Each one of them displayed leadership qualities, promoting themselves with posters, writing a speech, and then standing up in front of two hundred of their peers to deliver it. I was impressed. After Bun Bun finished, I was verklempt.
On the way home, I thought to myself how much I don’t want any of those kids to grow up and be hedge fund managers.