It looks like you're using an Ad Blocker.
Please white-list or disable AboveTopSecret.com in your ad-blocking tool.
Some features of ATS will be disabled while you continue to use an ad-blocker.
Reuters' Alistair Barr is reporting that Facebook's lead underwriters, Morgan Stanley (MS), JP Morgan (JPM), and Goldman Sachs (GS) all cut their earnings forecasts for the company in the middle of the IPO roadshow.
This by itself is highly unusual (I've never seen it during 20 years in and around the tech IPO business).
But, just as important, news of the estimate cut was passed on only to a handful of big investor clients, not everyone else who was considering an investment in Facebook.
In other words, during the marketing of the Facebook IPO, investors who did not hear about these underwriter estimate cuts were placed at a meaningful and unfair information disadvantage. They did not know what a lot of other investors knew, and they suffered for it.
Selective dissemination of this sort could be a direct violation of securities laws. Irrespective of its legality, it is also grossly unfair. The SEC should investigate this immediately.
The company surprised investors after disclosing, just days before the initial public offering, that its revenue may be hit by more users transitioning to mobile platforms, where advertising is less proven. That prompted the analyst at Morgan Stanley to surprisingly tell clients that he was cutting his revenue forecasts for the company.
The company's current price still implies very high annual growth rates. Thomson Reuters Starmine, meanwhile, using expected growth rates of about 10.8 percent over the next decade, values the shares at $9.59, or less than one-third of its current price.
Originally posted by grimreaper797
Yeah, I don't think the glitches had anything ominous about it. The ridiculously high traffic caused that. Warning signs were there though.