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FNC’s Eric Bolling on the IPO of Facebook and why it wasn’t as successful as the company had hoped.
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The finger pointing has -- of -- Facebook's IPO troubles investors are blaming Morgan Stanley NASDAQ and FaceBook itself what happened.
Joining the company now this is safe for us ladies and -- Eric -- -- almost all of the five on the Fox News Channel and today.
Because it's his first appearance -- bonding company he is wearing a tie thank you very much that's -- live at the time is very grateful -- so goes the.
The total of about the IPO that's FaceBook IPO -- I was involved in several IPOs -- took a nymex public I was on the board of directors of of at the time the third largest IPO in history.
And what the way IPOs works -- it is -- decided take on a big company -- bring your shares public to sell shares that it took to the public sector.
What their next happens is there's a dog and pony show you going in big -- the temperature for your shares of your stock you find out.
Who's going to buy the investors you know the big banks the pension funds etc.
it's -- And then you come up with a valuation a price and -- -- shares floating.
This is what the valuation -- trying to hit that number can actually little graphic here but people -- -- the board got you trying to hit this number.
On the spot sell pub we have this relative to -- and -- this number on the spot if after an IPO the shares rise dramatically you've missed price that because you -- -- too low.
More demand for this chair shares and you thought what happens is the company loses because the companies going to be involved -- -- sell their shares.
At get the valuation the lower price and then they rally but the investors who jumped in.
Are thrilled with the because -- innocent bystanders date date participate on the way up.
On the converse if the opposite happens where after the IPO shares dropped dramatically you've missed price that is well -- priced -- too -- -- value the company to high.
But we just what happens the company wins so the company sold shares at -- higher valuation he investors jumped in bought the shares from the company.
Are left hole on the back on the higher price -- so the company -- low -- -- -- which by the way so I sent out an email Friday afternoon sank.
While perfectly priced IPO because it ended the day where it started at the IPO price.
When it didn't know.
Is that behind the scenes there were quite a few banks cut.
Some of the underwriters who didn't want what's called a broken IPO which means should be settled below its IPO price.
They didn't want it to -- broken so they supported the shares of promise.
Nobody I mean nobody is bigger than the markets certainly took a couple of days couple hours we realize that they were there -- because one of our holdings shares up and they fell apart.
So to sum -- up the -- Was FaceBook itself -- you -- all money company and all the insiders at the company to lose will the banks which supported this thing in the first place.
And the people who got this off at 38 dollars a share and the -- -- -- the stock on Friday the boldest Australia lost yet the NASDAQ lost to us that this stock trading organization.
They lost because.
I didn't have a good system in place -- know what IPO nymex guys throwing in the structure of when we got here at nymex we did and New York Stock Exchange which is a special assistant to human -- saying thanks defy human beings we're supposed to open at 930 guess what -- -- 930 we want ready because there was influx of buying coming it's a wait and hold off.
So the specialists weighted at 10 o'clock they waited at 1030 they waited around 1045 to sit.
OK I think we have balance of buyers and sellers at a price at a value.
And they met and guess what is a very orderly opening the stock rose a little bit on the first day but nothing dramatic and it didn't really.
Eat in other words the human element added to the system okay now you you know thing or two about investing.
Sir would you think that that let's suppose you bought this thing -- thirty dollars and ship.
As a long -- prospect and I think there's a lot about viewers who've been looking -- the long term prospect get on the ground floor of a great American company brand new industry.
Get on the ground full study dolls -- shaft would you consider -- a good long term investment I think so I actually think even buying here a little bit I wouldn't -- you know if you wanna say.
I want 5000 dollars invested in FaceBook.
I don't need to put a thousand dollars a work here maybe another thousand dollars -- work if it goes a little bit lower if it goes higher put another thousand so spread your investment over our price range.
FaceBook -- 900 million users if they figure out a way to monetize it even more than they are right now can't tell -- that you cannot make money -- pull money in from 900.
That's -- intellectuals of that 45%.
This I would say -- I don't think its stock is perfectly priced on IPO -- breaks even.
I think there's something the reputation of the stock -- and halted for very very long time.
I think that this company was in a position -- to to get the benefit of the doubt another word today at a -- -- without -- ultimately bring because ultimately that's what was.
This was the ultimate sign of grief from FaceBook who -- they didn't care about IPO who -- they don't care about not a public company I.
Great are you kidding me -- and -- does not let let -- -- of my point then.
I'll tell you won't see are -- because there was enormous infusion.
From all over the past year and they thought.
But he thought that they could set this thing -- at 38 cents a -- more shares on the market that's right it is carried away hello infusing capital this coming march shares coming on the market but again I.
Different allergy what let me the president good morning wasn't that -- probably not -- -- you -- hindsight now it's down yeah.
What appetites and I hope people that that's I'm -- -- say it's gonna bubble in the first I don't know guidance it looked and.
-- -- that we -- Friday about the box of further Friday morning -- don't buy the stock right I did this -- exhibit -- expected to close -- 45 and you gonna come down from -- the -- was you can never could figure -- god -- -- I'm trying to -- -- -- to make people at what point I'm just saying that.
As the -- got hot as a road show got hot the bankers on the phone with FaceBook saying listen guys you can take the price up and you can offer more -- to your point.
So they get the maximum that they could not find maybe the company wins but I think for a company that says they don't care and that there to put a public good big -- -- take it's -- okay now what will go IPO thirty even though we can get 38.
Because we want the public to get the price do we want the public to be our partners on this I think that's -- Menem's with the remediation north and their reputation as a hot this.
The major red flags on and indeed quality of their dollar on slightly.
Doesn't even get through the fact that it kept bouncing off the 38 dollars a share old they've Friday with a huge red -- here suggested and I -- -- stepping into the map.
Oh I did this a -- companies public it was involved and I -- That are -- I'll admit I was here before long if it's up nine dollars -- my PO price you think it was about a poorly priced IPO still I I would like this -- a ten to 15% from the close -- -- -- -- -- investors make money it's a good it's -- present that's not -- but let me that means that means that FaceBook -- okay undervalued -- how it's really majority that -- company's public did you -- in that much retail interest.
When he was -- it.
It can sell what price -- all -- what I was there and they were right.
What -- speculative money you know until academics I don't interesting on Friday could balance -- not that well I don't know.
-- I I also told people to stay away from -- stock I'm not pumping space was stopped not simply say.
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-- -- -- -- better yeah.
God the god I love -- much -- exhibited --
