Underwriters band together, keep FB above 38. Market manipulation?

[oldtime]

Quote from wilburbear:

If a coordinated manipulation is good for the market, is it then ok?

the problem with you wilburbear is, you post some nice thread titles, but as soon as I see you are the OP I know it is just going to be more of your end of the world crap.

You need a another new handle, because all your old ones are just new troll warnings.

 

[arbprofit2]

The problem with buying at 38.01 is that within seconds of breaking the point it will drop several points. Too many people are playing off that support.

 

[Illum]

Quote from arbprofit2:

The problem with buying at 38.01 is that within seconds of breaking the point it will drop several points. Too many people are playing off that support.

Indeed. It's a great plan until it isn't. Selling 37.99 is where it's at.

 

[arbprofit2]

Quote from Illum:

Indeed. It's a great plan until it isn't. Selling 37.99 is where it's at.

If/when it breaks 38.00, there will be no 37.99 to hit. I'm not saying it will break it, what I'm saying is that the true risk of buying 38.01 with the idea of selling if he breaks the 38.00 is at least a dollar, probably more.

 

[zdreg]

Quote from rmorse:

I believe they call it "stabilization." I call it an IPO priced with hot air.

it is perfectly legal by the underwriters for the 1st 30 days.

 

[ChkitOut]

Does anybody see a problem with facebook current price by looking at the data below. I do.

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=3531488>

FB will probably drift down to about 20. Why? Because its already a mature company in terms of users. where is an insane growth rate going to come from to justify that PE ratio? Not ad revenue, that would be highly unlikely.

 

[shopster]

when they start to puke them out, rename it " face plant."

buy em all at zero.

FSLR went up on hype fumes also.

FB should get to zip sooner with " the Hucksterman " at the wheel.

s

 

[wilburbear]

Quote from ScalperJoe:

Interesting comment. I noticed extremely large bids on the Level II when it dropped intraday to the offer price of $38, bids in the MILLIONS of shares per exchange, it was truly insane.

The following quote is from the Greenshoe definition on Wiki, which is very telling:

"The SEC currently does not require that underwriters publicly report their short positions nor short-covering transactions. Investors who are unwary of underwriter stabilizing activity who choose to invest in what they perceive to be a stable issue can encounter volatility when the underwriters pause or complete any stabilizing activity."

Once the street begins coverage and the analysts start providing forward earnings estimates, it could easily encounter a "cascade of selling" as you mention should it not hold the $38 offer price.

Of course, it could also shoot up and stay up, who knows. I did take it for a quick scalp, to me it's just another symbol to trade.

This is interesting.

The situation is the maintenance of a price other than the price which an uncolluded free market would produce.

Is this not a good opportunity for profit? How long can artificiality be maintained? Viewed from one perspective, these may be the best opportunities of all. Ask Soros when the Bank of England tried to artificially support their currency.

I still expect bids in the millions of shares at 38 on Monday. At this point, most would agree that it's still beneficial if the facade is maintained.

Hopefully they can carry it until you can buy listed FB puts in varying maturities beginning on May 29.

 

[Daal]

Its a type of market 'manipulation' that costs money for the people doing(at least the trades, future IPO business is another matter). It shouldn't be banned at all. They are giving away money to people trading the stock by selling a synthetic free put

 

[Swan Noir]

The bottom line here is that, given the weak hands this crap appears to be in, none of us wants to be long at the open and none of us will rush to get long without some change in circumstance.

The "hot" deal that turns out to need the syndicate bid to stay above water on day one is likely to sell off at least 20% in the next 60 days if not sooner. Maybe much sooner. And when that deal is bloated in size, priced past the point of reason and with a shareholder base that includes a significant number of teenagers the potential for even worse performance is there.

If Spain's 10 year goes above 7% soon and stays there for a weak with Italy at 6.5% for the same week anyone want to hazard a guess where this crap trades? I'm not suggesting those instruments trade there in the next 30 days but it is certainly not inconceivable that they do.