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(Reuters)   SEC approves Facebook's plan to compensate those who lost money on its IPO. No, not you, peasant, we're talking about the rich insiders who because of technical glitches on opening day couldn't dump their shares off on suckers fast enough   (reuters.com) divider line 31
    More: Obvious, IPO, Facebook, U.S. Securities and Exchange Commission, stock traders, OMX, market makers  
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1413 clicks; posted to Business » on 25 Mar 2013 at 10:32 AM (1 year ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2013-03-25 10:41:54 AM
... not you peasant ...

They'd be a lot less like peasants if they didn't do stupid things with their money like purchase obviously far-overvalued tech stock in a company that can't really clearly explain exactly why what it does is worth what they claim. Especially when they were pitting themselves value-wise against the current proven king of ad revenue, Google.

The only people who got burned on the IPO and have anyone to blame but themselves are the megainvestors who got screwed by the glitches. They had a perfectly cromulent plan. The bozos managing their own IRAs who bought it just because they like Facebook were going to get burned no matter what happened.

The only people that should get compensation are the insiders. They lost money through no fault of their own. The little fish lost money because they did something that was obviously incredibly stupid. You shouldn't be compensated just because you make terrible decisions in life.
 
2013-03-25 10:42:58 AM

skozlaw: They'd be a lot less like peasants if they didn't do stupid things with their money like purchase obviously far-overvalued tech stock


I'm sure that's the answer.
 
2013-03-25 10:45:37 AM
what the fark
 
2013-03-25 10:57:50 AM
If you think that "peasants" actually have real access to buying at second one of an IPO (or at opening or after any forced brake into trading) then I got a bridge in NY to sell you. Trades are made by computers within micro seconds and Mark Cuban has been on a rampage to get those out of trading. Whatever your opinion is of Mark Cuban, he's right on this topic.

And if you believed the FB hype that a regular person off the street could make money on the IPO then you're a dumbass because you didn't do your due-diligence on the company and believed the hype. There were hundred of articles in the lead up to the IPO questioning the initial price.
 
2013-03-25 11:00:54 AM

skozlaw: The only people that should get compensation are the insiders. They lost money through no fault of their own. The little fish lost money because they did something that was obviously incredibly stupid. You shouldn't be compensated just because you make terrible decisions in life.


Bullshiat.  When you sign up for a pre-IPO company you accept a certain measure of risk that the company won't IPO, get sold, or even last a few years.  I have little sympathy for Facebook employees.  Especially since most had access to a grey market to sell their shares for years.

/and the market eventually did its thing and figured out what facebook is worth
 
2013-03-25 11:01:15 AM

ddam: If you think that "peasants" actually have real access to buying at second one of an IPO (or at opening or after any forced brake into trading) then I got a bridge in NY to sell you. Trades are made by computers within micro seconds and Mark Cuban has been on a rampage to get those out of trading. Whatever your opinion is of Mark Cuban, he's right on this topic.

And if you believed the FB hype that a regular person off the street could make money on the IPO then you're a dumbass because you didn't do your due-diligence on the company and believed the hype. There were hundred of articles in the lead up to the IPO questioning the initial price.


but how many peasants had mutual funds or 401(k) plans who managers DID buy big on FB on day one?
 
kab
2013-03-25 11:01:17 AM
Someone will be along any minute now to defend this.  Give it time.
 
2013-03-25 11:07:40 AM
The SEC is not the good guy anymore.
 
2013-03-25 11:09:58 AM

Phil Moskowitz: I'm sure that's the answer.


It's hard to take a person's whining about their money problems seriously when they choose to do something obviously dumb to waste what they have. There's taking a calculated risk and then there's just being retarded. Buying FB stock at anything close to the IPO price falls into the latter category.

Simple arithmetic made it obvious that the FB IPO was a looming disaster and many, many, MANY of us said as much over and over again and were simply shouted down and told we were stupid because we were going to miss out on the next Google. Probably by many of the same buffoons who insisted well into 2002 that the tech bubble would never pop, the DOW was headed over 20,000 and home prices would only go up forever!

My sympathy is less than overwhelming for people who lost a significant amount of money because they couldn't do a bit of simple math and refused to listen to anybody who could. Until they fix that problem, other steps of the solution will just be wasted on them.

Which is partly why I think one of the first steps is re-evaluating as a country how we choose to compensate people for their work so that people with no capacity for it don't have to invest just so they don't wind up having to live on cold beans and cat food when they're 75.
 
2013-03-25 11:11:24 AM

Magorn: ddam: If you think that "peasants" actually have real access to buying at second one of an IPO (or at opening or after any forced brake into trading) then I got a bridge in NY to sell you. Trades are made by computers within micro seconds and Mark Cuban has been on a rampage to get those out of trading. Whatever your opinion is of Mark Cuban, he's right on this topic.

And if you believed the FB hype that a regular person off the street could make money on the IPO then you're a dumbass because you didn't do your due-diligence on the company and believed the hype. There were hundred of articles in the lead up to the IPO questioning the initial price.

but how many peasants had mutual funds or 401(k) plans who managers DID buy big on FB on day one?


Even if so, the exposure is not that big as I'm not aware of any mutual fund or 401(k) fund that allows investment in any one company to be higher than 5% of all assets. And after 2008 I doubt any smart manager will even get close to 3%.
 
hej
2013-03-25 11:13:31 AM
I might be angry about this if I owned any Facebook stock.
 
2013-03-25 11:15:19 AM

gingerjet: When you sign up for a pre-IPO company you accept a certain measure of risk that the company won't IPO, get sold, or even last a few years


None of those things have anything to do with this so I have no idea why you would even bring them up. This is about compensating traders who lost money because NASDAQ's systems were all screwed up, not because somebody bought stock at the wrong time.

WTF is the argument against this, anyway? NASDAQ mishandled the IPO and some people lost money as a result of their failings, so NASDAQ wants to compensate those people who were affected. That shouldn't be allowed to happen just because the affected people were mostly already rich? Is that the basic argument here?
 
2013-03-25 11:22:54 AM

skozlaw: Phil Moskowitz: I'm sure that's the answer.

It's hard to take a person's whining about their money problems seriously when they choose to do something obviously dumb to waste what they have. There's taking a calculated risk and then there's just being retarded. Buying FB stock at anything close to the IPO price falls into the latter category.

Simple arithmetic made it obvious that the FB IPO was a looming disaster and many, many, MANY of us said as much over and over again and were simply shouted down and told we were stupid because we were going to miss out on the next Google. Probably by many of the same buffoons who insisted well into 2002 that the tech bubble would never pop, the DOW was headed over 20,000 and home prices would only go up forever!

My sympathy is less than overwhelming for people who lost a significant amount of money because they couldn't do a bit of simple math and refused to listen to anybody who could. Until they fix that problem, other steps of the solution will just be wasted on them.

Which is partly why I think one of the first steps is re-evaluating as a country how we choose to compensate people for their work so that people with no capacity for it don't have to invest just so they don't wind up having to live on cold beans and cat food when they're 75.


Nobody really gets this, but something horrible happened in this country in the mid-1970's to workers.  When companies switched from defined benefit pension plans to just matching 401(k) contributions, it was a very bad day for the average worker.  In either model, the same amount of money has to be put into the system to ensure a decent probability of a specific return on investment.   The problem is, with the 401(k)  all the risk has been transferred from the corporation to the individual, which economically is a stupid thing.   Corporations are theoretically immortal, so if there is a down year in the stock market or even a whole bad cycle, they can somewhat shrug off thier losses as they know there will inevitably be a boom cycle coming along later, and that over time stock markets always increase in value.  The individual has no such luxury of time.  If they cash out during a boom-fantastic, they have more money than they counted on,  but if they just happen to reach 65, say a couple weeks after the 2008 crash?  Well then they are simply screwed, and they get to see thier retirement nest egg shrink to nothing, and are forced to delay thier retirement (if they can) or live on next to nothing.

That this seismic change in US society happened without a whimper of protest or a scintilla of real analysis of what it would me to the average person, is utterly remarkable to me.
 
2013-03-25 11:55:10 AM
Yay Obama!
 
2013-03-25 12:09:38 PM
Move along now... nothing to see here... move along...
 
2013-03-25 12:37:32 PM

ddam: If you think that "peasants" actually have real access to buying at second one of an IPO (or at opening or after any forced brake into trading) then I got a bridge in NY to sell you. Trades are made by computers within micro seconds and Mark Cuban has been on a rampage to get those out of trading. Whatever your opinion is of Mark Cuban, he's right on this topic.


This is a beautiful representation of the current trading problem.  When you have companies that are putting servers inside the NYSE datacenter just so they can execute trades 5ms faster than the other guy who doesn't have a box inside the datacenter, there's something fundamentally wrong.  The answer to this would be simple, everyone has to hold onto a stock for at least 30 seconds, maybe a whole minute.  Well, it would  be simple, except...

Mrbogey: The SEC is not the good guy anymore.


And hasn't been for some time now.  They should get rolled into the CFPB so Cordray and those boys can clean house over there.
 
2013-03-25 01:00:38 PM

Magorn: Nobody really gets this, but something horrible happened in this country in the mid-1970's to workers. When companies switched from defined benefit pension plans to just matching 401(k) contributions, it was a very bad day for the average worker. In either model, the same amount of money has to be put into the system to ensure a decent probability of a specific return on investment. The problem is, with the 401(k) all the risk has been transferred from the corporation to the individual, which economically is a stupid thing. Corporations are theoretically immortal, so if there is a down year in the stock market or even a whole bad cycle, they can somewhat shrug off thier losses as they know there will inevitably be a boom cycle coming along later, and that over time stock markets always increase in value. The individual has no such luxury of time. If they cash out during a boom-fantastic, they have more money than they counted on, but if they just happen to reach 65, say a couple weeks after the 2008 crash? Well then they are simply screwed, and they get to see thier retirement nest egg shrink to nothing, and are forced to delay thier retirement (if they can) or live on next to nothing.

That this seismic change in US society happened without a whimper of protest or a scintilla of real analysis of what it would me to the average person, is utterly remarkable to me.


If you still have the majority of your retirement funds in stocks at age 65 you weren't going to retire at 65...
 
2013-03-25 01:02:26 PM
Praise be the Holy Job Creators (Creators be praised).
 
2013-03-25 02:05:53 PM

AdolfClamwacker: Magorn: Nobody really gets this, but something horrible happened in this country in the mid-1970's to workers. When companies switched from defined benefit pension plans to just matching 401(k) contributions, it was a very bad day for the average worker. In either model, the same amount of money has to be put into the system to ensure a decent probability of a specific return on investment. The problem is, with the 401(k) all the risk has been transferred from the corporation to the individual, which economically is a stupid thing. Corporations are theoretically immortal, so if there is a down year in the stock market or even a whole bad cycle, they can somewhat shrug off thier losses as they know there will inevitably be a boom cycle coming along later, and that over time stock markets always increase in value. The individual has no such luxury of time. If they cash out during a boom-fantastic, they have more money than they counted on, but if they just happen to reach 65, say a couple weeks after the 2008 crash? Well then they are simply screwed, and they get to see thier retirement nest egg shrink to nothing, and are forced to delay thier retirement (if they can) or live on next to nothing.

That this seismic change in US society happened without a whimper of protest or a scintilla of real analysis of what it would me to the average person, is utterly remarkable to me.

If you still have the majority of your retirement funds in stocks at age 65 you weren't going to retire at 65...


Pretty much this.  The stock market has a growth-decline cycle of 4-6 years, so you really should be converting much of your stocks into cash (or, more conservative portfolio mix) about 5 years before you will need them, to lock in their values during the good times.  If you plan to hold on to ALL your stocks right up to the day you retire, then you deserve to be left holding the bag if the market goes south.  I don't expect everyone to be market-savvy, but they do have great age-based investment portfolios out there that have incrementally more conservative mix the older you get, which does all the work for you.
 
2013-03-25 03:13:13 PM

AdolfClamwacker: Magorn: Nobody really gets this, but something horrible happened in this country in the mid-1970's to workers. When companies switched from defined benefit pension plans to just matching 401(k) contributions, it was a very bad day for the average worker. In either model, the same amount of money has to be put into the system to ensure a decent probability of a specific return on investment. The problem is, with the 401(k) all the risk has been transferred from the corporation to the individual, which economically is a stupid thing. Corporations are theoretically immortal, so if there is a down year in the stock market or even a whole bad cycle, they can somewhat shrug off thier losses as they know there will inevitably be a boom cycle coming along later, and that over time stock markets always increase in value. The individual has no such luxury of time. If they cash out during a boom-fantastic, they have more money than they counted on, but if they just happen to reach 65, say a couple weeks after the 2008 crash? Well then they are simply screwed, and they get to see thier retirement nest egg shrink to nothing, and are forced to delay thier retirement (if they can) or live on next to nothing.

That this seismic change in US society happened without a whimper of protest or a scintilla of real analysis of what it would me to the average person, is utterly remarkable to me.

If you still have the majority of your retirement funds in stocks at age 65 you weren't going to retire at 65...


Yes, absolutely. You deserve to live the last 20 years of your life in poverty because you made one dumb decision late in life.
 
2013-03-25 03:26:14 PM

Magorn: Nobody really gets this, but something horrible happened in this country in the mid-1970's to workers.  When companies switched from defined benefit pension plans to just matching 401(k) contributions, it was a very bad day for the average worker.  In either model, the same amount of money has to be put into the system to ensure a decent probability of a specific return on investment.   The problem is, with the 401(k)  all the risk has been transferred from the corporation to the individual, which economically is a stupid thing.   Corporations are theoretically immortal, so if there is a down year in the stock market or even a whole bad cycle, they can somewhat shrug off thier losses as they know there will inevitably be a boom cycle coming along later, and that over time stock markets always increase in value.  The individual has no such luxury of time.  If they cash out during a boom-fantastic, they have more money than they counted on,  but if they just happen to reach 65, say a couple weeks after the 2008 crash?  Well then they are simply screwed, and they get to see thier retirement nest egg shrink to nothing, and are forced to delay thier retirement (if they can) or live on next to nothing.

That this seismic change in US society happened without a whimper of protest or a scintilla of real analysis of what it would me to the average person, is utterly remarkable to me.


What's really funny is that I'm actually a fan of the 401K (with incredibly generous matching) over the pension.

Pension: I work, I retire, company/government is having hard times so they cut the pension.
401K: I work, I get money into the account now, I retire, I have money.

Yeah, a recession can screw me, but a recession will screw my pension as well, and then I just wait a few years and my 401K recovers and everyone's happy.  Absolute worst case, the company cuts off their matching program, but it's my money.

/Of course I'm sitting in CA where marginal Income + Sales is not quite 18%, and they're still broke because of the pensions.
//Yeah, they're not getting that money.  When the Democrats are saying "It's time to cut pensions because there's not enough blood in the stone", the pensions are getting cut.
 
2013-03-25 03:32:10 PM

meyerkev: What's really funny is that I'm actually a fan of the 401K (with incredibly generous matching) over the pension.


The beef I have with it is that to be truly successful at it you basically have to either hire someone else to do it (which can have a serious impact on your growth potential) or make it a second part time job. Some schmuck sweeping floors and washing tabletops at night shouldn't have to go home and be expected to be a portfolio manager as well

We value the wrong things in this country. You can't just work hard and succeed anymore because wages have completely left millions behind and then on top of that even if you do scrape some money together for retirement you're expected to put it up in a market against people with extremely powerful and complicated systems of taking it from you as a matter of course.

It's like we've gone back to a high tech version of the 1890s or something....
 
2013-03-25 04:31:50 PM

skozlaw: We value the wrong things in this country. You can't just work hard and succeed anymore because wages have completely left millions behind and then on top of that even if you do scrape some money together for retirement you're expected to put it up in a market against people with extremely powerful and complicated systems of taking it from you as a matter of course.

It's like we've gone back to a high tech version of the 1890s or something....


This is exactly right, and that fact sucks.  The "regular investor" or someone who holds stocks for longer than 10 seconds at a time has no chance anymore against the massive institutional houses and the rules they've set up for themselves.
 
2013-03-25 05:12:31 PM

Magorn: skozlaw: Phil Moskowitz: I'm sure that's the answer.

It's hard to take a person's whining about their money problems seriously when they choose to do something obviously dumb to waste what they have. There's taking a calculated risk and then there's just being retarded. Buying FB stock at anything close to the IPO price falls into the latter category.

Simple arithmetic made it obvious that the FB IPO was a looming disaster and many, many, MANY of us said as much over and over again and were simply shouted down and told we were stupid because we were going to miss out on the next Google. Probably by many of the same buffoons who insisted well into 2002 that the tech bubble would never pop, the DOW was headed over 20,000 and home prices would only go up forever!

My sympathy is less than overwhelming for people who lost a significant amount of money because they couldn't do a bit of simple math and refused to listen to anybody who could. Until they fix that problem, other steps of the solution will just be wasted on them.

Which is partly why I think one of the first steps is re-evaluating as a country how we choose to compensate people for their work so that people with no capacity for it don't have to invest just so they don't wind up having to live on cold beans and cat food when they're 75.

Nobody really gets this, but something horrible happened in this country in the mid-1970's to workers.  When companies switched from defined benefit pension plans to just matching 401(k) contributions, it was a very bad day for the average worker.  In either model, the same amount of money has to be put into the system to ensure a decent probability of a specific return on investment.   The problem is, with the 401(k)  all the risk has been transferred from the corporation to the individual, which economically is a stupid thing.   Corporations are theoretically immortal, so if there is a down year in the stock market or even a whole bad cycle, they can somewhat shrug off thi ...


send me your newsletter please...
 
2013-03-25 06:36:42 PM

Magorn: skozlaw: Phil Moskowitz: I'm sure that's the answer.

It's hard to take a person's whining about their money problems seriously when they choose to do something obviously dumb to waste what they have. There's taking a calculated risk and then there's just being retarded. Buying FB stock at anything close to the IPO price falls into the latter category.

Simple arithmetic made it obvious that the FB IPO was a looming disaster and many, many, MANY of us said as much over and over again and were simply shouted down and told we were stupid because we were going to miss out on the next Google. Probably by many of the same buffoons who insisted well into 2002 that the tech bubble would never pop, the DOW was headed over 20,000 and home prices would only go up forever!

My sympathy is less than overwhelming for people who lost a significant amount of money because they couldn't do a bit of simple math and refused to listen to anybody who could. Until they fix that problem, other steps of the solution will just be wasted on them.

Which is partly why I think one of the first steps is re-evaluating as a country how we choose to compensate people for their work so that people with no capacity for it don't have to invest just so they don't wind up having to live on cold beans and cat food when they're 75.

Nobody really gets this, but something horrible happened in this country in the mid-1970's to workers.  When companies switched from defined benefit pension plans to just matching 401(k) contributions, it was a very bad day for the average worker.  In either model, the same amount of money has to be put into the system to ensure a decent probability of a specific return on investment.   The problem is, with the 401(k)  all the risk has been transferred from the corporation to the individual, which economically is a stupid thing.   Corporations are theoretically immortal, so if there is a down year in the stock market or even a whole bad cycle, they can somewhat shrug off thi ...


basically, in the 70s, workers were left to be grownups and handle their own futures?

holy farkfarts what a horrifying concept.

i'm no bootstrapper 'i got mine, fark you' sort of fellow, but i for one would rather manage my own fortune and future, rather than sit around on a dole waiting for some vague corporation to give me a monetary handout...
 
2013-03-25 06:59:35 PM

buttery_shame_cave: but i for one would rather manage my own fortune and future


Many people wouldn't and don't think that having a second job as a stock broker should be a requirement just to not live in poverty for the last years of their lives. Why, in a time of enormous corporate profits and record production, should people be getting less from the places that employ them?

You'd have a point if there was some legitimate reason for cutting those benefits, but there isn't. The corporations cut those benefits and kept the money for themselves and their investors. People are working harder for less and being told that if they have a problem with that it's because they're lazy and irresponsible. It's bullshiat.

buttery_shame_cave: rather than sit around on a dole waiting for some vague corporation to give me a monetary handout...


Why is it a handout? Because you say so? It's compensation for doing a job. Is your paycheck a "handout"? What about health insurance? Is that also a "handout"?
 
2013-03-25 07:21:09 PM

skozlaw: Many people wouldn't and don't think that having a second job as a stock broker should be a requirement just to not live in poverty for the last years of their lives. Why, in a time of enormous corporate profits and record production, should people be getting less from the places that employ them?


I'm not disagreeing with what you say in the least, but what prevents someone from just doing index funds?  Is it really that complicated?
 
2013-03-25 07:46:02 PM

skozlaw: Phil Moskowitz: I'm sure that's the answer.

It's hard to take a person's whining about their money problems seriously when they choose to do something obviously dumb to waste what they have. There's taking a calculated risk and then there's just being retarded. Buying FB stock at anything close to the IPO price falls into the latter category.

<snip>

Which is partly why I think one of the first steps is re-evaluating as a country how we choose to compensate people for their work so that people with no capacity for it don't have to invest just so they don't wind up having to live on cold beans and cat food when they're 75.


On the first paragraph, yea I agree it was a foolish investment.  Anyone following the markets before the 2002 tech bubble crash saw the stink rising up from it in waves.  Also, I'm just a worker bee I know I'm not going to score off any hyped IPO.  The hype is there for a reason and that reason is NOT to inform me.  Some people still believe the emperor has clothes, it's sad but true. What can you do but hope they wake up at some point?

As to the second paragraph quoted I couldn't agree more.  I think the same salesmen who came up with pushing a dream retirement if only you would risk your money in the market is also selling me the magic IPO (all your dreams will come true).  We need to demand a better retirement system, one that isn't predicated on the idea that we have to give a bit of our money away to have a shot.  We will have to demand it but most don't see the imperative, instead they believe the Emperor still has clothes. What can you do but hope that most people wake up at some point ?
 
2013-03-26 03:02:45 AM

skozlaw:  Why, in a time of enormous corporate profits and record production, should people be getting less from the places that employ them?

You'd have a point if there was some legitimate reason for cutting those benefits, but there isn't. The corporations cut those benefits and kept the money for themselves and their investors. People are working harder for less and being told that if they have a problem with that it's because they're lazy and irresponsible. It's bullshiat.


www.irle.berkeley.edu

...but but but corporations HAD to stop the retirement plans because they simply couldn't afford them.  Where would they find that kind of money?

/the US economy and tax system are designed to help Romney, Gates and Buffett throw another $100,000,000 on the pile
//it is not designed to deliver access to healthcare to all US citizens
///oddly enough Gates and Buffett have a problem with this
 
2013-03-26 10:00:13 PM
Is saying you don't own any Facebook stock the new "I don't have a Facebook account"?
 
2013-03-27 12:52:50 AM

Comic Book Guy: ddam: If you think that "peasants" actually have real access to buying at second one of an IPO (or at opening or after any forced brake into trading) then I got a bridge in NY to sell you. Trades are made by computers within micro seconds and Mark Cuban has been on a rampage to get those out of trading. Whatever your opinion is of Mark Cuban, he's right on this topic.

This is a beautiful representation of the current trading problem.  When you have companies that are putting servers inside the NYSE datacenter just so they can execute trades 5ms faster than the other guy who doesn't have a box inside the datacenter, there's something fundamentally wrong.  The answer to this would be simple, everyone has to hold onto a stock for at least 30 seconds, maybe a whole minute.  Well, it would  be simple, except...

Mrbogey: The SEC is not the good guy anymore.

And hasn't been for some time now.  They should get rolled into the CFPB so Cordray and those boys can clean house over there.


I don't think there's a fundamental problem with the speed of the trade. That they can execute trades so fast that the price can be ginned into what they want is though. Yea, perhaps mandatory hold times would be best to offset quicktrades designed to skim money.

Of course, actually holding them accountable and not letting them roll back bad trades due to faulty algorithms would be nice too.
 
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