This article just says “people are F’n stupid” and it is why stocks and financial institutions are getting a bad rap. It isn’t the industry, it is the dumb-asses that think they can make a quick buck with little experience and no work.
It is the people that shouldn’t be involved with speculative investments to begin with that create the public’s perception of a problem…because the moment these type of people lose money they couldn’t afford to lose, they whine like babies and blame others for their mistakes. What is worse is that these types of people, when told they don’t “qualify” to make speculative investments, complain about their rights and being regulated out of the industry by exclusion…but when you let them trade when they can’t bear the financial loss, and they lose money, then they scream for more regulation in the industry (so long as they are still permitted to invest their last dollar in the hopes of getting rich quickly.)
1) How would FB “buffer” your retirement plan unless you expected a big spike in the IPO? It’s the underwriters job to price it accordingly so the “corporation” gets the largest return of capital on the sale (which is why they are going public to begin with, to raise operating capital), not to underprice it so the retail investor in the secondary market gets a windfall gain. IPO does not mean”offering of underpriced stock”, you need to learn that.
2) Exposes hype? WTF does that even mean? The hype was exposed before…otherwise it would have been called a secret. We all saw the hype, it was always exposed, and somebody somewhere is always hyping something. The truth is, this guy just believed the hype and created false expectations of quick financial gains.
3) If you can’t afford to lose a months salary, you shouldn’t be putting it in speculative investments to begin with!!!!
4) Facebook only dropped about 16% at this point, the guy acts like he got entirely wiped out. He maybe lost $600 if he got in at $38. Worst case scenario he bought at $45, which would have got him 90 shares of stock investing 4K, which at $32 would be $1,170 loss. Again, if you can’t afford to lose 1,200 bucks, it shouldn’t be in speculative investments!!!
5) You can’t blame FB for your loss on Zynga, saying the combined total due to FB is $2,250. Maybe FB drew attention to the fact that Zynga is also overpriced, but that is Zynga’s shortfall and shows that you basically made the same mistake twice….and you’re blaming both mistakes on FB, which is BS. Hmmm, maybe you shouldn’t be buffering your retirement with stocks from the exact same “social networking” industry.
6) You can’t value a stock, which is absolutely dependent upon the will of the people to voluntarily provide that company content such that the company can sell advertising around it….and then value the F’n stock at multiples that are 5-10 DECADES worth of estimated annual returns. You are basically betting that your grandchildren will still have a desire to upload personal content onto Facebook for free, and it is highly unlikely that the rate of technology will make that viable for another 77 years. The largest fundamental thing to realize is that Facebook doesn’t provide anything but a platform, they are entirely dependent upon people uploading their personal content for free so that Facebook can exploit that for add revenue. They only provide a platform, one of theoretically millions that could be created. And this guy wants to buffer his retirement in probably 40 years with Facebook stock?
Okay, I’ll leave my comments to those just about the guy the headline refers to, but I could go on. If they changed the revenue forecasts and only told the institutional investors and did not disclose the information to potential retail investors, then that is a problem, as well as firms being potentially liable for the electronic glitches (though your trading agreement usually has you waive recourse for slow fills and the like in advance of trading)….otherwise, this is just an example of people being delusional, and then angry when their delusions aren’t fulfilled. People want a bubble market, and they cry when they can’t have one.