Facebook Flash Crash

There are probably some important things happening in ‘Merica today, like Arizona being all racist again or CIA drones operating in domestic airspace. But let’s face it: you don’t care about that (boring, AMIRITE?), and therefore neither do we.

Since Facebook (NASDAQ: FB) is about 104 billion times more of a priority in your life, today’s Nerd Link O’ the Day is dedicated to it, and to you my pretties.

As you may recall, shares in FB had a mixed first day of trading last Friday, and today the stock fell below its $38 per share IPO price in early morning trading. The underwriters have since stopped supporting the $38 level, so today could be an interesting day. To be clear, FB’s market capitalization in five years or ten years will have no correlation to how its stock price performed on its opening day, or its second day, or on any particular day. But that won’t stop us from having a laugh at people who bought FB expecting to make a quick profit.

If FB’s laughably bullish 100-1 price/earnings ratio wasn’t enough to dissuade some investors from partying like it was 1999, maybe its two-tiered share structure will be.

James Surowiecki has a very good piece in the New Yorker this morning about how Mark Zuckerberg still has a majority of the company’s preferred stock, allowing him total institutional control despite owning just 18% of the company’s shares. This is a textbook example of how corporate governance should not work, and maybe institutional investors are starting to understand just how much Herr Zuckerberg ain’t care.

Stock futures are up this morning, so it’s not a case of FB being caught up in a sinking tide. As of writing, FB is testing the depths of $33 per share and it’s unclear when the stock’s technical support will kick in.

Quoting @zerohedge:

If FB hits $0 before it can be shorted, many will be very angry.


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