by Richard Edmondson
Saturday, May 26th, 2012
The much-ballyhooed Facebook IPO—how surprised should we be now to hear charges that the whole thing was pretty much an insider trading scam from the get-go? As we learn here:
Morgan Stanley, Goldman Sachs Group Inc., JP Morgan Chase & Co. and other underwriters along with Facebook Inc. were sued by investors who claimed they were misled in the purchase of the social network firm’s stock.
The plaintiffs, who are seeking to proceed on behalf of a class of Facebook investors, said the company and the banks didn’t disclose lower revenue estimates before the share sale. The members of the proposed class have lost more than $2.5 billion since the initial public offering last week, according to a complaint filed today in Manhattan federal court.
But while small investors lost upwards of $2.5 billion, by contrast, Facebook co-founder Mark Zuckerberg pocketed $1.1 billion from the IPO, as reported here , while Goldman Sachs didn’t fare too badly either, profiting to the tune of $235 million. Facebook went public at $38 a share, but sadly the IPO was plagued by trading errors and a 16 percent drop in the share price, and the small, so-called “retail” investors, aren’t too happy.
“The true facts at the time of the IPO were that Facebook was then experiencing a severe and pronounced reduction in revenue growth,” the plaintiffs said in the complaint.
This growth is declining because the majority of Facebook’s newer users log on through mobile devices. This is a problem because mobile applications don’t display the advertisements, and 85 percent of Facebook’s revenue reportedly comes from advertising. According to the complaint, in the hype and hoopla leading up to the IPO, the banks named in the lawsuit reduced their estimates of Facebook’s earning prospects for the year 2012, but failed to inform potential investors.
“The underwriters took down their earnings estimates dramatically during the road show and only told a select group of investors,” said Samuel Rudman, a lawyer for the plaintiffs.
Rudman made those comments on Wednesday, May 23. Now, however, comes a report that not only did the banks fail to share what should have been public information, but that Goldman and JP Morgan may have actually been making bets behind the scenes that the share prices would drop. “While both banks helped manage the IPO, they also reportedly helped hedge funds bet that the new stock would fall through a process known as shorting,” we read here. “Investors who shorted Facebook made millions as the company’s value dropped 11 percent on Monday and a further 9 percent on Tuesday before rebounding.”
So the bottom line is that the small investors suffered heavy losses on the IPO—while the inside traders made out like, well, bandits. After all we’ve heard over the past several years about criminality on Wall Street, why is it there are still gullible Americans who get suckered into pouring their hard-earned money into this “market,” an institution that today has become little more than legalized thievery (assuming it ever was anything but that). Speculation now has it that the Facebook IPO “will push more individual investors out of a stock market they already distrust after the financial crisis,” but if the marks haven’t learned by now that Wall Street is a massive Ponzi scheme, you have to wonder if they ever will. Click here to watch a cartoon animation on the Facebook IPO that someone uploaded to YouTube. “Insiders found no shortage of investors to fleece,” the video says at one point.
The question arises, of course, as to how much of a role Jewish identity and tribal loyalty play in all of this. We should keep in mind that according to the Talmud it is quite permissible for Jews to cheat or steal from Gentiles—as in Sanhedrin 57a, where it states: “When a Jew murders a gentile (Cuthean), there will be no death penalty. What a Jew steals from a gentile he may keep.” One of Israel’s chief objectives right now is regime change in Syria. Think about that as you watch the following report on “Facebook terrorism” and the role it is playing in the deadly events now playing out in Syria. The whole report is quite fascinating, but I would call your attention especially to comments at approximately 3:40 into the video: “While Facebook’s administration has previously blocked pages that openly support Bashar Assad, it has so far failed to do anything to stop the calls for the killing of his supporters.”
Now consider a report here that Goldman Sachs, following last week’s Facebook IPO, is now “ramping up investments in Web startups,” including a firm called AnchorFree. As the report states, the company “provides a so-called proxy service, which lets users connect to the Internet via remote servers so that they can’t be tracked and so residents of countries like China and Iran can skirt censors enforced by governments.” AnchorFree CEO David Gorodyansky has high praise for Goldman Sachs, calling them “very savvy product people,” and says the cash infusion will enable his company to buy servers and hire engineers to help with its push into mobile Web browsing.
So let’s see…Facebook is blocking pro-Assad pages, but allows pages that openly call for the killing of Syrians who support their government…while in the meantime, we find Goldman investing heavily in a company whose services will ultimately benefit USAID-funded dissidents in Iran. Yes, it does sound a bit like Jewish tribal loyalty.
Or perhaps we might refer to it simply as “Zuckerstein.”