I’ve been asked to comment on the Facebook IPO and the issues with the Nasdaq. I’ll have a market update below.
First of all, the Facebook IPO was released in a very bearish market environment. The market moves based on liquidity. When the market is going down, money is coming out of the market. Thta being the case, there generally isn’t enough demand to fuel stocks, nevertheless new IPOs.
Second, The IPO was loaded with stock. This wasn’t LinkedIn, which issued only a small amount of its float. Facebook has even more shares coming on the market at the 3 and 6 month point where it will have 2.2B shares outstanding…
I’d avoid Facebook for 6 months.
As for Nasdaq, they are not liable for trading losses. If you bought FB and it went lower, welcome to the stock market. This is a scenario I discuss in my trading courses and it happens all the time.
However, if you bought facebook, but Nasdaq didn’t facilitate the order entering your account for several hours after you made the trade – and ONCE you became aware of the price you entered at, and the price it was trading at – AND you sold your position, you may have a chance. But as soon as the loss manifests to you, and YOU make the decision to hold the position (which most people will do because that’s simply how our brains are wired) then you accept responsibility for the loss.
It reminds me of Enron – although not as severe – a stock that went to zero and holders (all the way down) complained they never had a chance to get out. Well, that’s not true at all. They had numerous chances to get out. It was their human nature that kept them long the stock. All the way down to zero. It’s the way we’re wired.
So if you’re upset that you bought FaceBook (FB) and you’re holding a losing position, welcome to the stock market. However, if you bought, but never received confirmation or received confirmation so late that it caused you losses, then by all means – make a claim with the Nasdaq.
As for a market update, we’ve recently issued 50 options recommendations, 5 stock recommendations and a major call on the market. To see our recommendations, click here.