Facebook ipo IPO Tempts Mankind With The Forbidden Fruit
Listen to a recent radio show where Facebook was a major topic now: click
The Facebook ipo IPO (FB) stock price per share and overall morale has fallen drastically since its $38 IPO release just over 1 weeks ago. To all those that jumped on the Facebook ipo ipo bandwagon along side the mainstream media filled with enthusiastic chants and raves shouting to the moon its time to retire! My message to you is simple and direct, cut your loses, the momentum has left the building and with the most recent support at $31.00 dollars breaking like a piece of stale spaghetti much more significant loses could occur if the basic technicals are ignored! This is the textbook definition of what we refer to as a falling knife. Whether or not the drop in price is justified is not of any relevance based on the fact that fear has complete control over the trading chart.
Based on past exerience in similar situations with emotion driven trading, the chances of a ray of light parting the clouds followed by instantaneous change in the direction of the momentum is close to never going to happen. What we have seen in the price of Facebook ipo shares could potentially take a long term time period to settle and recover. With that being said there are some key elements that would have to happen. The first of which is a confirmation of a bottom, followed with an established support, and a catalyst strong enough to endure to upward selling pressure of the investors that are currently holding the Facebook ipo "bag". I use this term lightly and it represents investors that are currently red on the trade that will more times than not panic to get out of the trade with minimal loses. As many read this article there will be a wide variety of emotions that will dictate your overall mood and acceptance to the station on the table.
The underlying fact is that the Facebook ipo IPO was hyped by the mainstream media on a level that is comparable to a late night wrestling debut. To add to the mix of pure delusion disregard for basic investment principles Facebook ipo neglected to make pertinent information readily available as required to the public prior to entering the public sector.
With less then exciting revenue numbers that hit the table prior to the IPO, party balloons seemingly running out of air, and the realization of a one night stand. The mood and immediate emotional value factor left quicker than the ghost of Christmas past. That is not to say that all is said and done, investors must not allow the fast paced deceptive trading environment lock them into a stock that has not even felt the market for a comfortable price pocket yet. A bottom will be established at some point which is typically followed by a bounce in price action that could be taken advantage of in a profitable way.
Facebook ipo Lets Call A Spade A Spade
The Facebook ipo facade was drawn on the page directly in front of us with pastel paint similar to the way child's fairy tale would be presented. Don't take this the wrong way, there are a vast amount of significant benefits to Facebook ipo and their astounding market reach. Other than the obvious marketing benefits from being the worlds largest and most interconnected virtual community,Facebook ipo has a strategic lock on literally infinite amounts of consumer data that stretches to the darkest corners of the globe. In today's day and age the consumer data acts as a wild card due to the overwhelming demand and diverse utilization internally and externally for specific consumer information of this caliber.
Based on my own personal opinions,I feel as if there are numerous social competitors that are finding a comfortable niche in the coat pockets of Facebook ipo. Just based on a market share perspectives alone, the projected shrinkage must be taken into account due to the explosion of social media alternatives, verticle niche markets, and cleverly created competitors.
Luckily for Facebook ipo the groups underwriting their IPO were some of America's top grade, hand picked, big heads J.P. Morgan (JPM), Goldman Sachs (GS) and Morgan Stanley (MS). Ironically these major institutions that were privileged with handling the underwriting segment of this IPO are also the very same entities that tell the general public which stocks to buy and when. A direct conflict of interest immediately comes to mind until I ponder for a minute, and find myself feeling helpless in the fact that in the coming years they will probably be Governors, homeland defense agents, and potential Presidents of the very flag I fought for.
It is no coincidence that news is emerging that banks in charge of the company’s initial stock offerings may be facing A potential official investigation over what is being called “selective release of negative news”. We stand and absorb this potential investigation with less confidence then waiting for our very own Wall Street bull to break his footings and run into traffic. As an addition there are further claims that JP Morgan, Goldman Sachs, and Morgan Stanley selectively offered pertinent information to their largest clients prior to official release.
If this is found to be true then the erratic and aggressive price actions witnessed could have been nothing more then the big money running for the closest fire exit while you and I browsed the dinner menu. As the days grew near and the buzz cloud reached an almost unimaginable level the faithful underwriters on the Facebook ipo IPO decided to reduce the profitability forecasts within the twelfth hour a couple of days before the IPO, on the public's own watch, within the public's own market. For me this was nothing new, I encountered a similar situation just a short month ago when I was seemingly bait switched into purchasing an expensive vacuum with similar closing tactics.
Unfortunately it appears as if this may be the case of big money, mixing with even bigger names, and the system that is put into place being played like a violin. I would like to add that in my opinion these types of actions are from from the first feather in the hat of the "Good Ol Boyz Club". The saddest aspect to this equation I feel is the fact that this particular instance is nothing more than a small scale representation of the markets, power, and secret handshakes which are defining the market as a whole.
The Facebook ipo Cheer Team Has Left The Building
At Stock Legends we are well aware of these particular forms of market setups due to the fact that we operate a majority of our business in the OTC segment of the market. More often then not the investors will commit to a public companies stock only to be heavily diluted or manipulated by one of the many systems at certain individuals finger tips. When these situations come into play we refer to them as a "Pump and Dump". The meaning behind the term is almost exactly how it sounds. The public company is pumped excessively to breathe a buzz cloud into the air.
When these situations occur nine times out of ten the company or individuals that are involved are aware of some form of negative information or circumstance that the investors are not made aware of. As the trading begins the people involved will drive up the stock price and then hammer it down at the speed of light trapping investors in a less then positive trading position.
I am not saying that in this particular situation regarding Facebook ipo this is what happened, there are numerous pieces to the puzzle that still need to be placed into their corresponding spots. Unfortunately based on human nature and a solid gut feeling I am going to place by bet on red and that is that systems and regulations were taken advantage of resulting in the current pandemonium and anxiety being displayed by bag holders nationwide. It is difficult to make an educated guess on exactly what took place, the bottom line is that fear set in and spread like a wildfire. In this process the "buzz" and "momentum" was transformed into fear, anxiety, and in many cases sheer disbelief.
As we all know the markets and direction of stocks can change in an instant for the positive or for the negative. As a world leading company who is rewriting the blue prints for what we will call future communication it is safe to say that the could be nothing more than a small puddle to step over and a nice housewarming present for Facebook ipo from the public segment.
In a typical situation writing an article like this one I would look for some form of technical or new fundamental data to be able to calculate and estimated bottom. Unfortunately the chart is still so new, the only key factor that I am able to conclude is that the key support broke today at $31 dollars and this is by no means a bullish signal. Without that key support there is little technical analysis to go off to call a bottom or potential bounce price.
This has given the world wide trading community the opportunity to speculate and we have heard projections thrown out as low as $15 and as high as $25 but with that being said it is anybody's game at this point. There are many different angles and opinions here, in the paragraph right below is a post from our Senior Technical Analyst Matt Chart and his views:
"As overvalued as Facebook ipo was from its real value, it will also decline just as far away from fair value as it becomes undervalued. To do the calculations to find that figure out, we can use a simple formula. For simplicity sake Let's say that face book's overvalued point was $40. (IPO was $38 and it briefly hit a high of $45). At $40 a share we can then say that face book was 100% overvalued from its real value ($20). From overvalued at $40 a share, we must have an equal counter reaction to give us the undervalued figure. To calculate that we take its overvalued percentage, divide it by 2, and multiply the percentage by it's real value so 100% / 2 = 50% x $20 = $10 a share. I am not suggesting face book will reach $10 a share anytime soon, as I am not a credited investment advisor and assume no strings attached to any risks or perceptions taken away from this post. Yet don't be surprised as the Facebook ipo panic reaches it's maximum threshold in the following months we could potentially see figures unimagined today. Just as the excessive greed was released on the IPO Date, so too will excessive fear be present among Facebook ipo investors. Yes, the ensuing weeks will surely be an interesting spectacle as billions more of investing dollars are wiped from the Facebook ipo investment accounts." Matt Chart
I personally have a bit of a different perspective on Facebook ipo, being that I am fully aware of that "wild card" they hold which is enough consumer data to sell and use towards intense profits for many years to come. If you are one of the investors that took an unfortunate loss due to the IPO of Facebook ipo I would be first in line looking for answers. In a day and age where Government, Banks, and Politics are so tight that it is difficult to even disypher where the head starts and the tail ends who knows if we will ever get to the bottom of the issue. This is the free market, watch this topic closely as it progresses and don't be shy about getting vocal and demanding answers.
Looks Like The Scoreboard Is Showing A Tie
For Future Reference I felt that it would be an important point to place the current scoreboard below for you to review in future reference:
Facebook ipo: 1
JP Morgan: 1
Goldman Sachs: 1
Morgan Stanley: 1
Buy the fear, sell the greed? Tough Call.
* Please Stop By and See Us | Send This To Your Social Networks *
Like It - Tweet It - +1 It
For more articles like this one on the Facebook IPO sign up for alerts now!