There is a lot of bad blood, and a lot of finger-pointing. Is it the Nasdaq’s fault, for stumbling out of the gates? Morgan Stanley’s fault, as the IPO engineer? Are secondary markets to blame, for keeping Facebook private so long? peHUB breaks down the potential villains in this clueless game of Clue. It’s like the REM song—“Everybody Hurts”—and, now, that includes the social network, those that enjoyed the ride up on its so-called “halo effect,” bankers and, of course, the shareholders. peHUB breaks down the usual suspects, you can call out villains in the comments section.
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Facebook
Morgan Stanley
Nasdaq
Secondary Markets
Washington
Field
Who helped mark Mark’s marks to market? Well, Mark is one suspect. After all, Mark Zuckerberg held Facebook private on secondary markets as its stock price lost trajectory. And the company didn’t do itself any favors leading up to its IPO, in its communication with Morgan Stanley. The decision to bring Facebook public ultimately laid in his hands.
Image Credit: Mark Zuckerberg // Eduardo Munoz of Reuters
The investment bank has egg on its Facebook in the IPO’s
disastrous wake. It is subject to shareholder suits and investigators’ inquiries—but, above all, it could face difficulty earning back the trust of both entrepreneurs and retail investors.
Image Credit: Morgan Stanley
It shouldn’t have been so difficult to complete an order for shares. There is no telling what shareholder appetite would have been like had Nasdaq not botched the offering—but the exchange can’t be made to bear the fault that falls with the company and its roadshow communications—or, lack thereof. Right along with Nasdaq, the Hub will lump in all the newest shareholders of Facebook who had a bad day on May 18, and who haven’t seen their luck improve since.
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All along, secondary market operators like Secondmarket and Sharespost have preached they’re the solution to a busted IPO market, but it seems—looking back on Facebook’s stock, and its trajectory on secondary markets—it is the pre-IPO trading that doomed Facebook stock. Amidst years of hype, Facebook stock traded into the high $40s on private exchanges—only to come crashing down the second the public had an opportunity to buy in.
Image Credit: Secondmarket.com
Once again, DC has a mess on its hands. Retail investors are screaming to the SEC. The Obama Administration just passed a law that makes it easier for companies to shield themselves from bad press when they prepare for an IPO—not for VC companies alike, this even goes to help out private equity backed firms, too. In 2012, and beyond, Capitol Hill and the SEC will have to confront, and perhaps re-evaluate, some of the decisions they made with domestic investment policy. Facebook probably won’t feel the brunt of these regulatory switches—but current, and future, entrepreneurs may.
Image Credit: U.S. President Barack Obama signs the Jumpstart Our Business Startups Act in the Rose Garden of the White House in Washington by Jason Reed
You’ve seen the mess, now here’s the rest. GSV Capital, a pre-IPO buyer of Facebook shares,
got creamed as bad as the social network. Zynga
didn’t fare much better. And it remains to be seen how 2012′s IPO bumper crop will fare in the wake of Face-Plant.
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