Facebook IPO

As the dust settles on the heavily anticipated Facebook IPO, the critical reviews and press releases read like the depressing movie reviews of an over hyped would-be summer movie blockbuster. Adding to general dissatisfaction, cries of foul play have started to surface. These allegations have been leveled at the major power player investors that initially supported and then drew back on their estimations of the glory that would follow Zuckerburg’s foray into the public marketplace.

Massachusetts Secretary of Commonwealth has gone so far as to subpoena Morgan Stanley for reneging on their initial projection of Facebook’s revenues, during their second quarter, just mid-way through the IPO roadshow. When financial giants pull back their initial projections so dramatically in such a key stage of a company’s public debut, there is no doubt that new insider information has surfaced. This information however was not decimated to the public and could lead to dramatic financial losses to a not-so-privileged consumer marketplace. Massachusetts’s commonwealth is obviously not going to take this seemingly inevitable loss lying down.

Their subpoena of Morgan Stanley is only the first cry for blood that has come from Facebook’s lackluster performance.  The villagers are sharpening the pitchforks. The metaphorical torches are being lit and the initial disappointment over Facebook’s IPO has bred the desire for a villain.  Morgan Stanley issued the statement, “Morgan Stanley followed the same procedures for the Facebook offering that it follows for all IPOs. These procedures are in compliance with all applicable regulations.” One major problem has arisen from Morgan Stanley’s unpredictable change of projection.

  • Selective Dissemination: Whatever information Morgan Stanley had was not made fully available to the general consumer marketplace. It’s almost as if you lost money on the Superbowl because the star quarterback was injured. Later you realize that there was an injury report released that only a select few were privy to.

It seems bitterly ironic that Facebook’s troubles may lie in the heart of their “privacy controls.” Information that should have been disseminated to the general population seemed to be only available to select “friends list.” Surely Zuckerburg wouldn’t mind reaching back into this timeline and writing a few timely posts that would have certainly earned him a few more “likes” at the end of his day of trading.