Its down 27% at $27 now, but it is only 30% of its way down. Its going down to $7. MS has only one client - the previous owners of FB, who have all sold out.
MS orchestrated the wonderful transfer of wealth from the poor, misinformed, hopeful (and now insulted by Gorman), to the rich, famous, and now even richer.
Facebook Buyers Expecting Surge Were Naive
By Michael J. Moore on May 31, 2012
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Investors who bought Facebook Inc. (FB) (FB) shares expecting a large short-term increase in the stock price were “naive,” Morgan Stanley (MS) (MS) Chief Executive Officer James Gorman said.
“People who thought they were buying this stock so they could get an enormous pop were both naive and ordered under the wrong pretenses,” Gorman, 53, said today in an interview with CNBC. “Why you’re taking companies public is to establish a long-term investor base. To that investor, I would hope that they haven’t panicked during the flurry of the last few days.”
Morgan Stanley was the lead underwriter on Facebook’s IPO, which set a record for technology companies by raising more than $16 billion. The transaction produced the worst five-day return among the 10 largest U.S. deals of the past decade. Investors have cited concern over growth prospects for the largest social- networking service and shareholders filed lawsuits that said the company and its underwriters overpriced Facebook at $38 a share.
Facebook rose $1.41, or 5 percent, to $29.60 at 4:30 p.m. in New York trading. The shares have dropped 22 percent from the IPO price.
Gorman said the retail allocation of 26 percent wasn’t unusual given the “unprecedented” level of demand from individual investors. Regulators should look at the IPO because of the attention surrounding it, he said.
“I’m confident that we followed exactly the procedures we follow, we did the job of the underwriter,” Gorman said. “We represented the interests of the sellers and buyers putting together a book as part of a syndicate, and we, the other underwriters and the company agreed on that pricing.”
To contact the reporter on this story: Michael J. Moore in New York at mmoore55@bloomberg.net
To contact the editor responsible for this story: David Scheer at dscheer@bloomberg.net
