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FaceBook NASDAQ:FB IPO hype has reached fever pitch now with finger pointing, blame assignment, cries of fraud and at least 3 investigations. None of it is warranted in any way shape or form.

The blame for FaceBook losses sits clearly on the buyers, real investors did not buy FB.

The stock was overvalued at $38 and anyone with even the most basic understanding of a Balance Sheet and Valuations would have never bought the stock. All of that information was publicly available. In the weeks before the IPO Economist Shayne Heffernan valued the offering at $13, the $38 was an excessive an extraordinary price based on the PE ratio, Book Value, Future Earnings and any other valuation method possible.

Anyone without the ability to make such a calculation has no business buying equities of any kind.

Was the IPO pricing unfair? No it was brilliant, the company sold all the stock it had assigned and sold it at the absolute premium due to the superb advice from the underwriters.

The company, they are the people that risked their own money and time to build the business for many years and achieved a monstrous success, they then took some of that hard earned money and hired Wall Streets finest advisers to advice them on how to make the most out of an IPO.

The advisers, paid to deliver results, delivered in grand form for their clients the company.

Who lost? the people who have done nothing for the company, nothing for the advisers, the people who sat on the sidelines until the last minute bought some IPO shares and expected a fast profit in a short period of time for no work. The greedy people who read the headlines and did not look at the valuation of the company despite it being shoved in their face on a daily basis.

And now those people demand and investigation, cry fraud and claim to have been cheated. What is worse is moronic politicians and journalists who offer these people a place to complain.

What the FaceBook IPO does show is how close the USA is to becoming a Communist State, now according to Politicians and the Media an IPO should be “for the people” the IPO process should offer a free gift to the general population.

In other words the role of a company IPO is to provide a benefit to the citizens. In Chairman Mau Zedong’s Little Red Book, the role of a company is to employ the people.

I am not seeing a difference between the two.

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Knightsbridge Law is a boutique law firm in Thailand. The lawyers of our firm have provided legal advice on a variety of areas of the legal practice, including:

Investment Grade Real Estate;
Mergers and Acquisitions;
Establishing Business in Asia;
Corporate and Commercial consultancy;
Asset Management;
Banking, Finance and Securities;
Listing Companies in Asia;
Global Metals and Mining

Shayne Heffernan

Shayne Heffernan oversees the management of funds for institutions and high net worth individuals.

Shayne Heffernan holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reached a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.Read the Terms of Service

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