Facebook (NASDAQ:FB), Zynga (NASDAQ:ZNGA) Fail on FB IPO
Not as if you are not tired of hearing chatter about Facebook, but remember Facebook’s underwriters would not, did not let its share price fall below 38 a share on opening day.
That is what underwriters do. They bring a company to the public market in return for a guarantee to buy at the IPO price.
Without Facebook, Zynga would not exist, without Zynga, Facebook would not have 12% of the revenue that it has. .
If Zynga and Facebook are connected at the hip, why did one tank while the other did not?
The fact is they both tanked.
Ok, Facebook did finish up on the day by the metric that matters; above its IPO price. But that was well below its opening price of just North of 42/shr. it even tapped 45 for a few seconds.
So, traders thinking that FB’s IPO price was overvalued, may have taken it out on Zynga, heretofore the proxy buy for FB.
Bad news for Zynga. That is why the news did not get any better for the creator of Mafia Wars, even after its stock stopped “flash” crashing, trade in ZNGA was halted twice during Friday’s session.
We can tell ourselves a story that makes sense of the day’s stock moves after the fact, but it’s hard to tell a story that makes today’s stock action look efficient. These kind of wild swings should not happen in a efficient market, but do and did in a big way today, enough to prompt a close look by the SEC .
CLOSING BELL: Facebook closed at 38.23 on more than 560-M/shrs.
Look out Monday, the underwriters will not be there with their “Safety Net.”
For those folks who missed buying Google NASDAQ:GOOG) and Microsoft (NASDAQ:MSFT) on there debut trading days, shares of Facebook may be their opportunity to be among the earliest investors in a tech company that radically changed the World.
Or, if some analysts I know are right, FB’s “paper” shares may have so little value in the years to come that they can be used to “paper” toilet walls.
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;
Banking, Finance and Securities;
Listing Companies in Asia;
Global Metals and Mining
Paul A. Ebeling, Jnr.
Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster’s Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.
Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels.
Best Hedge Funds 2013
Working with some of the World’s largest financial institutions HCM’s goal is to provide portfolio returns that exceed the S&P 500 Index benchmark while …
UAE Economy Seeing a Spring Boom
Driven by stable high Crude Oil prices, tourism, diversification and a liberal trade policy, the United Arab Emirates (UAE) witnesses an unprecedented …
Singapore Stock Exchange Preview
Shayne Heffernan takes a look at the trading week ahead in Singapore
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
An engulfing bearish line occurred (where …
The Hot List
Enviro-Serv Inc (OTCMKTS:EVSV), Medical Marijuana Inc (OTCMKTS:MJNA)
Enviro-Serv Inc (OTCMKTS:EVSV)
EVSV had a stellar dy yesterday, ut it looks like it is just the begining of big things, good …