I’ll admit it: I’m addicted to Facebook. When I heard that shares of stock would become available to the public this spring, I thought to myself, “I have to own a share of this company.” It seems most providers of other addictive items have stiff competition. Think coffee, soda, cigarettes, liquor, smartphones; each are offered by multiple brands. When I think of how to connect with friends far and near, there is only one place where everyone seems to be. For the simple reason that you won’t find me (or many others) on Google+ or MySpace, it appears there will be a lone survivor in the race for social network supremacy. If you’re not using Facebook, I fear society will force you to jump on the bandwagon, or (tragically?) be left behind—a similar fate to those that exist sans cell phone (Mr. Sommers the senior!).
I even made (make) the prediction that Facebook will be more successful than Google—and more dominant than Microsoft. You see, Google knows only where you are, what you’ve searched for in the past, and what you’re searching for now. Facebook knows all that and more—it knows everything about you: who your friends are, what you like, what your friends like, your age, hometown, sexual preference, relationship status, etc. That is what makes it the best positioned for marketing dollars in this age of TiVo.
In the weeks leading up to the IPO, I had many folks calling, emailing, and bending my ear about wanting in to the greatest social network ‘shareholder class’. I even had to scribble a list of those who wanted to buy—some at any cost—on the first day of trading. Two days before it was to be traded publicly, brokerages across the country halted taking orders to buy at the market open, as their systems were overwhelmed (or they feared the advantage over their clients that the market-makers would have lining up all those sucker orders).
I woke up early that Friday morning to see CEO Mark ‘Zuckerface’ ring the opening bell of the Nasdaq at 6:30am. Shares of FB were supposed to begin trading at 8am—which came and went with nary a trade. All the while, CNBC was predicting the price of that first trade with their ‘IPO pricing crosshair matrix thingamajig’. Their guesses, (based on existing orders at brokerages?) began at $46/share at 7am, and zeroed in on $42 by 8:25am, the time of the first trade. CNBC’s guesstimate was nearly spot-on, as FB’s first trade came in at $42.05.
I began madly buying for pre-ordered clients as soon as I could. Some of my orders were filled immediately, and some eerily hung up as “pending” for more than an hour. TD Ameritrade indicated the market-makers at Nasdaq had “issues” responding to the overwhelming amount of trades. Ultimately, I ended up getting filled on all my client purchase requests between a range of $38.19 (a client) and $42/share (in my IRA, ugh).
Since that fateful day, we now recognize that the underwriters pumped up the stock (that’s their job), Nasdaq wasn’t prepared to handle the orders, and now Congress will I’m sure convene a panel to scold all of the players. Up to this day, the only other IPO I participated in was Google, who did a democratic Dutch Auction, with no pitch-men or media-hype. I think we’ve all learned from this that Wall Street exists for those on Wall Street (surprise!), and that IPOs are merely fundraisers for company insiders. I’ll take the secondary market over IPOs any day.