The Facebook IPO is starting to look like a fiasco, not only because of mechanical glitches the first day of trading but because of alleged sneaky insider shenanigans that may have tipped off a favored few that that FB’s revenues weren’t going to be quite as robust as hoped. Morgan Stanley, the chief underwriter, is under scrutiny. Facebook shares went down in price rather than up, and the wizards of Wall Street know how to make money in either direction. So if certain favored clients had info that the unwashed masses weren’t privy to, that might not pass the smell test. Here’s the Reuters report. Here’s the AP account.
What strikes me about this is that it echoes cranky, snarly, surly things written in this space in recent days. I was partly kidding, but now I’m thinking that I should be every bit as cynical as I often pretend to be.
Of course no one has actually been charged with a crime and, when and if such charges are filed, they will be presumed innocent – just not here on my blog, where we will default to invective and rage and presumptions of guilt. Why do people use the term “class warfare” as if it were something bad?
Maybe it’s all a plot to help re-elect Obama. One of his big initiatives that gets little attention, relatively speaking, is the creation of a watchdog agency for Wall Street and banks. Comes along J.P. Morgan with its $2 billion-plus loss on a risky bet by someone known as the London Whale, and we now have this Facebook fiasco.
Maybe the fix is in, for real. We just don’t know who all the fixers are. Or what they’re trying to fix, exactly. Be afraid, be very afraid.
(Of course my life ain’t so bad – I’m now on assignment in western PA, rockin’ a Hampton Inn. Nice joint. Pool. Fitness room. Plenty of parking. Could have stayed across the street at the Motel 6 or whatever it is, but Hampton is how I roll. Question: What is the cut-off point between a hotel and a motel? I know Hampton Inn doesn’t consider itself a motel. But isn’t a Super 8 a motel? Philosophers have been arguing this since the heyday of Socrates. You recall that Aristotle militantly declared that Courtyard by Marriott was a motel.) (Even if the U.S. ceases to be the sole geopolitical superpower I bet we’ll still have the best hotel rooms. Try traveling in Europe, you may wind up in a room the size of Fiat, sharing a bathroom with strangers, and the “continental breakfast” will be a pastry baked during the Edwardian period.)