SD#63 You So Punny

Always in your heart . . . and nightmares

You wrote us! You actually wrote us!  Well, one of you anyway!  Thanks for the feedback, the zombie news, and Google’s Skynet . . . it was an interesting week!

Feedback:

Zuke at al,

You guys did a pretty good job of chewing over the recent facebook IPO.  You correctly stated that the underwriters of the float (Morgan Stanley) had to enter the market (ie buy stock) to support the issue price ($38).  The next trading day, they were not in the market (ie not buying) and the price dropped.  One wrinkle that you missed (and no one should expect you to actually get) is that current owners of the stock that wasn’t on offer (ie Mark Zuckerberg et al) can only sell the shares that they said they were going to sell in the IPO documents.  This means that they are restricted from selling the vast majority of their stock.  This restriction applies for a short duration (90 days – http://www.quora.com/Facebook-Inc-company/Is-Mark-Zuckerburg-able-to-sell-all-his-Facebook-stock-Any-restrictions-built-in-to-the-IPO).

This means that in 90 days time, there could be a glut of facebook shares coming onto the market.  When there are more sellers in a market than there are buyers, the price of the commodity will go down.  Even worse news for the Facebook IPO.

Headlines:

Fastlane:

Talking Point: Summer Movie Lineup

Zuke’s Favorite: The World’s Tiniest Police Chase
Stark’s Favorite: To boldly go where no action figure has gone before
Zohner’s Favorite: Vertical videos? Just say ‘no’.
Schmidty’s Favorite: A Funny Thing Happened on the Way to Thor’s Hammer

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