Facebook Stock is Confusing
By Victor M Adamus
I don’t do stock purchases anymore. Not since my entire portfolio hit the wall on
a black Friday just before the noble George W left office. In fact I kept telling my Broker to sell when
I saw the stock pummel. I actually had a
stock that was worth $33 a share drop to thirteen cents. The Broker, holding out for a big comeback, no
longer represented me. I cashed out the
rest in a panic. But Facebook? Even if you followed it recently nothing
makes any sense.
Facebook stock opened at $38 a share about a week ago. It reached a high of $44 a share its’ first
day of trading and has gone down ever since.
The drastic drop has cost investors an estimated $25 billion. How’s that for having money to lose? Of course those that lost, one investor alone
lost $100 million, is suing on the basis of insider trading and whatever else
will work to try to get their investment back.
Wealthy people can do that when they lose at the casino table. And this was a huge bet for a company with no
product that has as its claim to fame the largest social-networking
service. All that means is 900 million
people worldwide access Facebook daily to talk to each other and put up
pictures. Hardly a stock for future growth,
I think.
If you’re a Facebook fan, you may have seen the stock drop
under $30 yesterday. Not a good sign at
all. On the German stock market it was
trading at $28.41 and retail experts in the U.S. say it could even go
lower. “It could fall quite significantly
because it was priced at a significant premium”, said analyst Sameet
Sinha. Too bad you can’t get this type
of information before the stock goes public.
I’m beginning to feel that everything on Wall Street is
rigged. Certainly the Facebook saga will
be talked about for a long time. People,
experts, offering the whys as to the stock going down instead of climbing as
predicted. I’m glad I just sit on the
stock sidelines now. It’s much better
for my blood pressure. But along with
Chase losing $3 billion in a crap shoot that skirted regulations, also a week
ago, there is nothing on the horizon that tells me the stock market is stable.
2 comments:
The Stock Market in the beginning provided businesses with the opportunity to have another source of capital other than banks to finance their growth.
Instead of paying monthly interest payments, companies could borrow money from investors, using the growth of stock to provide investors with a dividend.
If, at some point in time in the future, investors wanted to sell their stocks, they would be able to do so for a profit or so perceived.
Over time, investors, brokers, and companies began to manipulate Wall Street as if it were a gambling casino which changed its complexion forever.
To compound the situation, business would develop short term business strategies to make sure that dividends could be paid to stockholders. These decision may or may not have benefitted the company from a long term perspective.
While we were thinking short term the rest of the world was thinking long term and we got caught with our pants down.
Unfortunately, middle class American can do NOTHING to change or dramtically influence this game.
It is a game of, by, and for the wealthy.
Our jobs are dependent upon this game as well as many of our pension plans.
AND, believe it or not, the President has very little, if any influence over businesses, even though the media claims Government uncertainty has caused businesses to pause.
BULLSHIT - Businesses perform risk analysis all the time and make investment decisions all the time as well both in America and overseas, regardless of what the Governments are doing or not doing.
Facebook is just another example of a Harvard educated rich kid trying to manipulate the system with his power, influence, and money, all of which is predicated upon a silly public that wants to share nonsense with each other.
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