Facebook Bankers Secretly Cut Facebook’s Revenue Estimates In Middle Of IPO Roadshow

Linky

And now comes some news about the Facebook (FB) IPO that buyers deserve to be outraged about. 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.

This is a huge problem, for one big reason: Selective dissemination.

Earnings forecasts are material information, especially when they are prepared by analysts who have had privileged access to company management. As lead underwriters on the IPO, these analysts would have had much better information about the company than anyone else. So the fact that these analysts suddenly all cut their earnings forecasts at the same time, during the roadshow, and then this information was not passed on to the broader public, is a huge problem.


Any investor considering an investment in Facebook would consider an estimate cut from the underwriters' analysts "material information."

Where there is smoke there maybe fire. I am sure there are more things that we may or may not find out, not just in FB but in the whole casino.

Things just dont even shock me any longer.. sad.

I saw this and I'm not surprised they cut their forecasts at all. I am, however, surprised they only told select investors.

I would imagine there will be some lawsuits and other fun goings on surrounding facebook's ipo.

I remember, a while back, an ipo coming out and being reversed shortly after the ipo. Between the b.s. pricing, the secret forecast downgrades, the massive delays in trading and the underwriters spending millions propping the price up, I wouldn't be too shocked if they reversed it

I just noticed an earlier version of this with a different title.

This one should be ignored or deleted.

TY

Here is the earlier version www.abovetopsecret.com...

This whole Facebook IPO was all hype to begin with .. Anyone with a brain couldve seen. Lets be honest what product does Facebook have too offer to make money???

Originally posted by OurSecretHouseCLUB33
Lets be honest what product does Facebook have too offer to make money???

Depends on how you look at it.
However, they will gladly record every thing you do and make a profile about you and sell it to the government while you do not make a dime. Sounds like a service to me.

Originally posted by Skewed

Originally posted by OurSecretHouseCLUB33
Lets be honest what product does Facebook have too offer to make money???

Depends on how you look at it.
However, they will gladly record every thing you do and make a profile about you and sell it to the government while you do not make a dime. Sounds like a service to me.

edit on 22-5-2012 by Skewed because: (no reason given)

LOL now that sounds like a service in which they can make money

They make money through advertisements, games, and databases.

The information they collect, and sell, is very valuable in the hands of government, marketers, etc.

reply to post by MentorsRiddle


And the sheeple just eat it up, and when they are done, they ask for more.

Once again, why anyone would think investing in a social media fad is beyond me......Facebook isn't cool anymore.

Originally posted by Skewed
reply to post by MentorsRiddle

 

And the sheeple just eat it up, and when they are done, they ask for more.

It's the new way of collecting data - a willing participant.

Sounds like FB had their shares valued too high...naughty naughty.
Now they are sold,FB will be a slave to advertisers,and most folks will soon ditch accounts when they get more adverts than content in IMO.

Ah well at least Zucky boy and his pals got rich...