Facebook IPO: running out of suckers?

[eridani]

http://www.dailykos.com/story/2012/05/20/1093190/-How-the-1-caused-the-Facebook-IPO-Bust

Shares are distributed to insiders at a discount to the initial float price. These insiders can be people who work at the company, initial investors, etc. -- but the insiders are also the investment banks underwriting the IPO, people selected by the investment banks underwriting the IPO, "special friends" who the banks have picked out to pass along a good deal., etc., etc.

All of these people are hoping for one thing and one thing only:

An astronomical instant rise in share price at the time of the public offering which allows them to dump the dump on unsophisticated "retail" investors before the price recedes.

<snip>

People like Mitt Romney, or banks like Goldman Sachs, are blood-suckers.

But what happens when you've already sucked your victims dry?

People just don't have the money -- or financial security -- that they need to buy into big new technology IPOs like Facebook. Who is Goldman Sachs going to dump their shares on, if normal retail investors aren't buying?

[Turbineguy]

1. BUT THE COMPANY IS WORTH $106 BILLION!111!

and for only a measly 38 bucks, you too can have a piece of the pie. OK, a morsel. Maybe a molecule. Would you believe half an atom?

[protect our future]

2. The smart money has already been made.

Day One: buy and sell and buy and sell and manipulate the market as fast as you can. Fortunes were made during that one-day-only sale. Who cares what happens on Day Two.

[Warpy]

3. Not only does John Q. Sucker have less money to blow

he's probably still smarting from the tech collapse 12 years ago, for jumping on every single IPO that was announced and having all his hard earned money simply disappear overnight.

I know I didn't have enough money to jump on the bandwagon in the 90s (well, I did, but it was budgeted for health disasters because I had no insurance), but I still regard "IPO" as a shortcut for "sucker bait."