>The deal FB made was they tell everyone about the business, everyone else prices it
The underwriters priced it - at what CFO told them he wanted. That's not usually how these things work (imagine a bank ignoring a property appraisal in favor of what you tell them the property is worth), but the banks are shells of their former selves and needed this IPO and all the promise it held pretty desperately. They protected themselves with the greenshoe/naked short, and retail investors got left holding the bag.
Maybe it's not "fleecing" per say, but it's not the kind of financial engineering an enterprise thinking about delivering long term returns to its investors would do.
My point was that the deal was structured in a way that practically ensured the share price would fall. To think otherwise, for facebook management or investors is to believe in hubris. I think it's telling and kind of odd that in Cuban's own defense of the deal, he's a sucker for having bought at the IPO price.
As an aside, high beta (volatility) stocks generally don't perform as well, long term, as do consistent growers with stable price action.
The underwriters priced it - at what CFO told them he wanted. That's not usually how these things work (imagine a bank ignoring a property appraisal in favor of what you tell them the property is worth), but the banks are shells of their former selves and needed this IPO and all the promise it held pretty desperately. They protected themselves with the greenshoe/naked short, and retail investors got left holding the bag.
Maybe it's not "fleecing" per say, but it's not the kind of financial engineering an enterprise thinking about delivering long term returns to its investors would do.