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David Menlow, IPOFinancial.com president, on how Facebook’s IPO and Nasdaq’s mistakes in trading it will impact other future IPOs.
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And says greedy get based -- and -- underwriters believe it or not all being sued for allegedly misleading investors.
So -- this deter other companies from going public joining us now thankfully didn't memo president IP of finance and dot com.
Even you kindly jumped on the phone and as a couple weeks ago when this thing when they -- FaceBook put out its -- strange the need to ask you this -- NASDAQ dated.
Messed this up.
Would we be even talking a map yesterday when we be instead saying the IPO market is off to the races.
Well I don't think -- be saying it's off to the races there were other fundamental problems that exist with the offering and it starts with Morgan Stanley but for a very different reasons.
There was no need to come up with a 28 to 35 dollar price -- -- initial range right if anything.
Thirty to 35 in narrow it down.
The should've left it where was because when they came up with the 3438.
And ultimately priced at 38 everybody thought the stock has hit the wall.
And when we saw the opening crosses where it was a 45 and started come down to 42 it was a problem.
But had to have the 35 dollar upper end of the range and -- price -- outside we would have at least had a good start with that but.
Morgan Stanley and all the other underwriters knew there was no follow through for buyers and aftermarket we've got.
Lawsuit stated flying -- frightened sent Morgan Stanley could be in trouble here at least.
Perhaps as we hear more will be tells coming out it wasn't very but I wasn't handled very well and -- -- legally as well well they yes those -- The headlines that are out there this is this watch tactic that is used by -- class action suits they go after everybody who was even mention the word FaceBook and it's a little.
Over the top and we have to find out where the even though a lot of good that's a tough but it doesn't mean it's gonna go.
We're right that should be little gotten a world talk about defending the little guy.
The little guiding get enough information the average got people you know look who are not Morgan Stanley and this this like.
Should the little guy even be in this business in this IPO market.
Well the little guy has to understand that they -- severe disadvantage in any IPO -- old added I think if you want it and you can get it.
Yeah if you wanna you can't get it if you get -- you don't want it right now but IPO to the retail investor announced stands for it's probably overpriced I.
I in this is not gonna change for the C foreseeable future because they've burned.
A lot of good will out there because people were sitting by and say.
I don't wanna do it I'm still reeling after 20082009.
With my 41 K so I will take a chance to say understand what this company does and it's gone.
That's from the investor side what about -- companies think about going public what impact does this have do you think -- any on the IPO.
-- overall well I'm gonna be a very positive person -- a relates to that this is a wonderful.
Event.
At the expense of FaceBook and the investors.
Because what we had prior to FaceBook the underwriters were aware it was a buyer's market and and they were pricing the deal so that the issue words -- disadvantage.
Where do you want to -- mr.
investor and we saw a lot of deals -- cut in price and now what we're gonna have.
Companies that are still going to go through this process they're gonna get a valuation haircut and -- fourteen to sixteen dollar deal you man that Japan and up seeing it just come.
Ten or eleven dollars.
So this isn't that -- little more illegitimate could be a more legitimate market now is the best way for again a little -- Gideon.
Through IPO funds or ETFs.
-- No I don't think that's a good play had a direct play they'll just feel better Salem and -- -- ATF for -- -- That you don't really know what's going on and if you understand it.
Invest -- it but you cannot just look at the prospectus cover you know through the first couple pages for a pretty pictures and say I like it.
You really got to do your.
Homework and that's with everything David -- parliamentary here thank you thank you IPO financial dot com -- out.
All right for driving back to investment grade status without the help of Uncle Sam we should note up next a look at the road ahead and in one -- will be.
While heading for the exit -- Plus we got -- on the -- but -- Gerri Willis is gonna tell us with the individual stockholders can do.
First let's take a look at some of today's winners and losers as we head out to break Expedia up -- traveling pants and parents.
