Naive! Morgan Stanley CEO James Gorman has no sympathy for Facebook investors who expected to profit from a first-day spike in share prices. “People who thought they were buying this stock so they could get an enormous pop were both naive and ordered under the wrong pretenses,” Mr. Gorman said yesterday in an interview with CNBC. To which he might have added: “Didn’t they read Devitt’s research?” Mr. Gorman, of course, had this to say in January to investment bankers upset over Morgan Stanley pay cuts: “You’re naive, read the newspaper.“
Citi’s country-bred whistle-blower: Sherry Hunt started her career in the mortgage business as a 17-year-old mom processing home loans in Alaska. By the age of 55, Ms. Hunt was supervising 65 loan officers in Citigroup’s mortgage unit. The year was 2004, and business was booming. Citi was buying loans from outside lenders that had been secured with phony documents, and Ms. Hunt’s reports highlighting defective loans were being buried. The housing bubble popped, of course, and Citi took $45 billion in Federal bailouts. That didn’t stop the bank from processing defective loans. In 2011, a supervisor told Ms. Hunt and a colleague that if the number of loans being classified as defective didn’t fall, it would be “your asses on the line.” The country girl turned banking executive didn’t back down. In the spirit of all great Americans, she went to court. Bob Ivry goes there too, profiling Ms. Hunt, who would ultimately win $31 million in a whistle-blower suit against the banking giant, in July’s Bloomberg Markets magazine.
Guess rumors that Facebook is working on building a smartphone of its own didn’t help: Facebook fell another 9.6 percent today, closing at $28.84, 24 percent below the offering price.
That comes after a New York Times story this weekend suggesting that Zuck & Co. have been assembling hardware and software engineers to Read More
Muted response: As the clock ticked past Facebook’s scheduled open, Nasdaq stayed mum on the technical glitches that delayed trading in the social media company’s stock by 28 minutes. The resulting chaos lasted hours, causing confusion over who had bought and sold how many shares at what prices—and leading to about $115 million in losses Read More
Henry Blodget, BusinessInsider aggregator-in-chief, disgraced Merrill Lynch analyst and the pundit who spent the weeks leading up to the Facebook IPO hammering on what were at face incongruous themes—overpriced Facebook stock was “muppet-bait” and Mark Zuckerberg was the greatest—is out with a new Facebook trope that’s Internet fantastic:
The ongoing controversy Read More
Prosecutors tried to stitch together separate strands in the insider-trading case against former McKinsey & Co. CEO Rajat Gupta, Facebook’s market makers may have lost $100 million due to Nasdaq glitches, and more in today’s Wall Street roundup.
U.S. v. Gupta: It was wiretap day at U.S. vs. Gupta, as prosecutors played FBI recordings of Read More
Red Carpet Real Estate
Thanks to the Facebook IPO, one lucky early investor may finally be able to buy that $50 million Tribeca townhouse he always wanted.
A West Coast-based Facebook insider has flown to New York twice to look at 144 Duane Street, the massive $49.5 million property listed with Prudential Douglas Elliman brokers Matthew Gulker Read More
While Facebook dominated the news, Warren Buffett’s secretive investment banker slipped into a New York courthouse. That and more in today’s Wall Street roundup.
Falling out? NYSE Euronext approached Facebook yesterday about listing the company’s stock on the New York Stock Exchange, a move which would be a bigger blow to Nasdaq than any punishment regulators dole out for bungling the first day in Facebook trading.
Last Friday, as his brainchild company went public, Mark Zuckerberg’s face filled the multistory video screen adorning the Times Square Reuters building, his image a grinning, pasty vision of triumph—little brother as Big Brother.
In the 30 seconds after the bell rang at the NASDAQ exchange, more than 80 million shares were traded, and with the IPO (really the night before, when the underwriting banks bought the stock from Facebook), Mr. Zuckerberg made $25 B.
But he wasn’t making any money off me.
Facebook and its underwriters face IPO backlash, the SEC indicates it will target VaR, and more in today’s Wall Street roundup.
Facebook flap: Research teams at Morgan Stanley and other Facebook underwriters cut earnings projections after updated regulatory filings on May 9 showed Zuck & Co. struggling to make money on mobile—and those Read More