Posts filed under “IPOs”
Fascinating comparison between Google and Microsoft gains since their IPOs from Dave Wilson. Earlier this month, Google managed to slip past Mister Softee in terms of market cap (MSFT is now $244.8B vs GOOG $243.56B).
Microsoft Corp.’s stock-market performance during its first eight years as a public company far surpassed Google. MSFT soared about 30-fold in the 8 year period after its March 1986 IPO, peaked at more than $600 billion in cap in December 1999.
The key to long term IPO performance is initial valuation when going public. Microsoft soared about 30-fold in the same period after its March 1986 IPO. Microsoft’s market capitalization, which peaked at more than $600 billion in December 1999.
The gap in stock performance reflects a disparity between the valuation of Google, based in Mountain View, California, and Microsoft, based in Redmond, Washington, when they first sold shares publicly. Google was valued at $23 billion in its IPO, which followed a price cut and a reduction in the number of shares sold. The dollar amount was 44 times the comparable figure for Microsoft, which went public at a $519 million valuation.
Consider this when you consider what Facebook’s long term performance might look like, coming public near $100 billion valuation . . .
Microsoft Gains Ease Sting of Google Valuation
Bloomberg, October 2, 2012
6 Buys, 3 Neutrals Average Price Target = $39 BofA/Merrill – Neutral – $38 PT Goldman Sachs – Buy – $42 PT Oppenheimer – Outperform – $41 PT JPMorgan – Overweight – $45 PT Piper Jaffray – Overweight – $41 PT Wells Fargo – Outperform – $37-$40 Range Credit Suisse – Neutral – $34 PT…Read More
The highly-anticipated Facebook IPO was plagued with problems, potentially costing thousands of dollars to many small investors and further damaging Wall Street’s reputation on Main Street. A Wall Street Journal report.
(I have a small cameo in this)
However big a clusterfuck you may have previously believed the Facebook IPO was, this WSJ article – Nasdaq CEO Lost Touch Amid Facebook Chaos — makes you realize it was actually worse, much worse. The Journal politely but devastatingly skewers Nasdaq for the bungled IPO trading. The words that come to mind is inexcusable and incompetent….Read More
John Hempton at Bronte Capital often makes for an interesting read. Today, however, I have to disagree with his take on the ethical obligations of investment bankers in the Facebook IPO. (Facebook and the sad case of ethical investment bankers). John writes: “In an IPO an investment bank takes a fee from a business to…Read More
The ongoing decline in Facebook stock is little more than a reassessment of the private market’s valuation — now recognized as somewhere between wildly optimistic and clinically insane. Bloomberg calls Facebook the “the worst-performing large initial public offering during the past decade” losing more than 20% in the 10 days since the IPO….Read More
Click to enlarge:
As Facebook’s IPO opened, real-time data feed (and HFT critic) Nanex Research noticed a strange anomaly: A Crossed market. This occurs whenever the Bid price is higher than the Offer (the spread is inverted).
What might be the source of this? Take a wild guess:
This also brings another example of the dangers of placing a blind, mindless emphasis on speed above everything else. Algos reacting to prices created by other algos reacting to prices created by still other algos. Somewhere along the way, it has to start with a price based on economic reality. But the algos at the bottom of the intelligence chain can’t waste precious milliseconds for that. They are built to simply react faster than the other guys algos. Why? Because the other guy figured out how to go faster! We don’t need this in our markets. We need more intelligence. The economic and psychological costs stemming from Facebook not getting the traditional opening day pop are impossible to measure. That it may have been caused by algos reacting to a stuck quote from one exchange is not, sadly, surprising anymore.
Ironically, the NASDAQ’s clients are no longer the investing public, but rather are HFTs. Whiole most people look at this as a black idea, I suspect the Nazz’ accountants think its much ad o about nothing . . .
More charts after the jump
Bart Chilton, a commissioner at the U.S. Commodity Futures Trading Commission, talks about delays in Facebook Inc.’s first day of trading and the impact of high-frequency transactions on stock exchanges. Nasdaq OMX Group Inc., under scrutiny after shares of Facebook were hit by delays and mishandled orders on its first day, blamed “poor design” in the software it uses for driving auctions in initial public offerings. Chilton speaks with Cory Johnson on Bloomberg Television’s “Bloomberg West.”
Source: Bloomberg May 21 2012
Amid allegations of selective disclosure of information and technical problems on the NASDAQ, Facebook’s initial public offering has led to a flurry of litigation. According to Roben Farzad and Josh Brown, however, the missteps are unlikely to lead to any meaningful regulatory reform. Roben is a senior writer at Bloomberg Businessweek and Josh is a financial advisor at Fusion Analytics. They talk with Bloomberg Law’s Lee Pacchia.
Bloomberg Law, May 24 2012