So Mr. Thiel turned $500,000 into a billion, long Facebook. That’s terrific and I am very impressed by his investing “style.”
When I told you “Vulture Capitalists” are the lowest form of human being, you scoffed at me and proceeded to eat chocolate pudding with whipped cream, like the fat fucks that you are. Well, with Facebook at new lows and Pete selling out of the majority of his shares DOWN AT THESE LEVELS, do you believe me now? Do I have your attention?
Good.
There is nothing wrong with selling stock and taking profit. However, I have a serious issue with the way Morgan Stanley and the Vulture Capitalists, like Thiel, marketed Facebook to the retail investor, propping up the valuation to unbelievable levels, and now bear witness to insiders abandoning ship after just 1 quarter of earnings.
Something is dreadfully wrong with this picture.
First of all, Zuckerberg needs to assert himself and oust Thiel from the board, immediately, like right fucking now. Second of all, Thiel, and the other VC’s, should go fuck themselves. None of these men are with top hat. They are the very worst in finance, totally devoid of comportment and decorum, slapping investors with their dirty hands and vexing people like me with their fucking faces!
Sell all social media stocks. Do not participate in the scam called IPO’s anymore. None of these men deserve exits after what they did with ZNGA, GRPN, FB, ANGI, etc. The list goes on and on and on.
SHAMEFUL!
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It is a shocking, overt display of greed and thievery on a gargantuan scale. They didn’t even really try to hide it.
It is unbelievable.
Not shocking at all. A lot of people saw this coming a mile away and refused to participate.
FIG!
Someone had to say it.
And by “it”, I don’t mean “FIG”, I mean “None of these men deserve exits after what they did with ZNGA, GRPN, FB, ANGI, etc.”
It’s one thing for a VC to fuck over the founders, partners, early shareholders, and retail schlubs, hell, those are all practically in the job description. But it’s quite another to fuck up so completely that you manage to fuck over the entire sector.
With the passage of time does FLY have any new insight on what happened with BATS?
Great commentary! Fucking thieves!!!!!!!
“Venture capital is about capturing the value between the startup phase and the public company phase. Others should be focused on capturing the value post the public offering.”
http://www.avc.com/a_vc/2012/08/lockups-and-insider-selling.html
fucking horseshit
What is JPM saying about The Fly?
http://blogs.barrons.com/techtraderdaily/2012/08/20/jpmorgan-thinks-priceline-is-still-fly-sees-shares-reaching-650/?mod=BOLBlog
The ‘People’s Tribune’ Moolahheaven has nothing but scorn for this scum. I look forward to the day when the emperor declares martial law and rounds up the vulture’s in the public square, dick guillotine’s at the ready…
With a financial system built upon greed it should be no surprise the devil’s hands are busy at work. Isn’t this what everyone is trying to do at every moment just on a larger scale? Sell the bag of shit for higher than you bought it for. No one actually cares about these companies unless they are long term investors or receiving dividends.
So he’ll sit on the board, but he won’t be a longterm investor (God forbid!). Gee that sounds just fine. Swell, in fact.
The Fly is God.
During a business meeting I had with some VC’s one of them came over to where I was sitting, (I had a water pitcher sitting next to me on the table). After pouring himself a glass I lifted my glass toward him, the universal “as long as you’re there fill my glass up too”. He sneered at me and walked off in a huff. In any event his cuff links probably cost more than a Jaguar. Must have been from NYC.
Isn’t Uncle Howard a VC?
“Angel investor.”
It’s no easy romantic life, no matter what you read about it.
It’s as feudal as all get out.
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I also have no problem with the guy banking coin as he put the risk on in the beginning BUT like you stated Fly, its the pumping pre-IPO that is sickening, leaving retail out to dry.
Its reasons like this that I could care less about how the economy affects market prices, HFT, QE infinity, etc. To me the market is a casino anymore and I have no respect for it. I am here to play accepting risk and that is all; if I lose it sucks and if I win then its onto enjoying the finer things in life.
RETAIL DOES NOT PARTICIPATE IN THE IPO. (see explanation below).
If you are dumb enough to buy into an IPO given the recent records (and no, they are not all terrible), then you should do some stove touching exercises to get your head straight.
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Spoken like a true investment banker Jake.
The FB ipo had the biggest retail participation ever. It was shameful how this was done. To call people dumb for buying an ipo is also shameful.
Why is it shameful? IPO’s are known high-risk investments, and treated so by FINRA, SEC and every regulatory agency known to man.
There is nothing more risky than a newly priced asset. Simple as that. You put clients into shit like that, you gotta reap what you sow. Your business is no more a charitable institution than is mine. Risk and reward, no crying in baseball.
FWIW, I’ve been actively prosletyzing against IPO’s for every client I’ve discussed the matter with since about 2001.
Structurally, they only make sense for two asset classes — the wildly speculative (ie, Facebook or the latest biotech), or the capital intensive “regular raiser” (like a REIT or an MLP).
I don’t have any problem with REIT IPO’s for example, because of their high cash flow distribution rate, which makes them less volatile.
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Hey Fly and others. While sickening, this manipulation is nothing compared to how wall street firms and bankers have been manipulating the markets for a century. I figured out long ago that the system is inherently rigged.
The only way to beat wallstreet is to outsmart them. Sometimes it takes guts and sheer strength in conviction for long term investors as the price is heavily manipulated for 1-2 years sometimes.
I love it as small investors are scared and I am not. over time they will be ‘convinced’ to join the party, just like with housing and the dot com boom. At that point I will be way past my existing 7 figure portfolio.
sad for those who are innocent. innocence is lost by me many years ago and know I am one of them.
I agree with you on the buyer beware part of this. But FB management, at least, had a responsibility to ensure the public value had some connection with reality. IMO, they should have stepped in and curbed the excessses being pushed by the VCs. Instead they were as greedy as everone else.
I also think that Thiel remaining on the board while blowing out almost all of his holdings even at the current depressed prices sends the wrong message about his confidence in the company’s long term future and commitment to that.
Some readers, here, would like to pick up some common $IBC and, dare I say, $VK shares (possibly with a shirt and mug grab bag) before this site (inevitably) goes public.
VK?
Jake, I have to disagree. FB was the excitement as I know there were many friends where I work asking if they should buy into FB, of course my advice was no as I don’t buy into IPO’s.
Working with people at my full time job is a great opportunity to get that retail sentiment as people I work with (non-finance job) have no clue about fundamentals or technicals, all they know is product and if they use it. And of course they knew FB and knew people used it having no clue about anything else on it.
Another case where there was the same sentiment from those people I work with was Visa. They were telling me how the stock was all over the place and how they had trouble getting fills. Of course these two stocks in comparison are apples to oranges but from the average investor standpoint that their research is only knowing the product and if they use it, they are the same.
More’s the reason not to buy a new stock at the IPO, but rather let it settle out over a number of months until its’ “real” market is established.
Perhaps FB is a good thing, as it will cancel the mistaken belief in non-financial types that IPO’s are a one way street to riches.
Hasn’t been true for years, but people are slow learners.
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INFUCKINGDEUD.
ps: Pincus from znga has an atrocious track record.
Lots of thieves and liars out there.
Yes, and not just in Congress.
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Why would you feel sorry for these people , these are the people that you and I make money off. If they wanted to believe these crooks then it’s all on them. Believing horse shit and hoping FB will be the next Google. FUCK THEM, IF I WANTED TO BE ON THEIR SIDE , I’D BE LOOSING MONEY .
Your sour grapes vituperation against venture capital (especially calling it “vulture capital” which is a completely different asset class) grows tiresome.
The new issue public markets suck because of the asshats in Congress making it harder for Joe Blow to participate in them, not because there are too many Joe Blows participating.
When I started out in the biz, at one of the Big Three Bulges, we used to do shitte tonnes of IPO’s. The good sized ones were generally parsed out “1/2 institutional” and “1/2 retail.” What that meant was that a deal would be far more stable at its inception because a good portion of the institutional and nearly 100% of the retail was buying an IPO to hold it for at least an intermediate period of time.
All that shit has changed today. First off, the dismantling of Glass Stiegel (which I have no real truck with one way or another), put the big banks in the drivers seat on IPO assignments. In other words, if a company wanted Bank of America debt financing, they sure as shit had better put Merrill on the left side of the IPO cover.
At the same time, Sarbanes Oxely was put into place which immediately drove available public offerings to the more “speculative” (read: “higher multiple”) edge of the risk spectrum. Your more retail-oriented offerings were going by the wayside because those companies just didn’t make sense to be public with the additional expense and regulatory hassle that move incurred. But yes, it still made sense to go public with “Facebook” or “Erectilex” (the latest biotech penile enhancement) because those deals could still garner that “growth multiple” exit value.
Markets will adapt, however, so all of the more quotitidian deals that used to be “safer” for the retail public started going to an increasingly burgeoning — and sophisticated — private equity market. That was always true on the venture side, but now the “PE player,” or the liquid source of financing or exit capital has become so large that it is far easier and less hassle for a “normal company” to access the private equity markets over the public ones.
That leaves only the real “high hurdle” stuff for the public IPO’s. Moreover, thanks to regulation, investment banks are shying away from making these IPO’s available to all but the most liquid, high net worth investors because of their fear of 1) law suits from retail plebs and 2) more gov’t intervention “for the good of the small plebs.
You get the government you ask for folks. Don’t vote for a feudal system and then bitch about it when those with the dough to evade the statists take that route.
“CAPITAL IS MOBILE,” and always a step or three ahead of the revenooers. (Often, by design and tacit agreement).
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I don’t give a shit if it grows “tiresome” on you.
If you don’t like the truth, don’t read it.
It’s not the “truth.” It’s whining.
If you have some response to my careful explanation, above, please respond. Your populist rants are no more “true” than are the garbage spewed by the statists who seek to commandeer your income for “fairness” sake.
I don’t cry for VC’s either, but you never see the 10 deals that go down the shitter, you only see the ones that work. I wouldn’t go into VC for all the TEA in Teavana.
Now PE? Different story.
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You are correct, if it wasn’t for VC’s small companies with a compelling story would go under.
Normally, selling private shares helps but doesn’t cover all of the operating expenses incurred in a growing company. The “jump start” that VC’s provide is necessary in order to keep key employees and pay the electric bill. In return they do backup the Brinks truck after the IPO.
Who is saying VC is bad? I am referring to Vulture Capitalists, people like Thiel and his ilk–disgusting greed mongers.
There are good VC’s and yes investment is necessary to kickstart ideas. But let’s not kid ourselves and believe that these angel investors are all good guys.
I don’t get it. What makes Thiel different?
Why is he a vulture investor? Because he took a risk at a high valuation and got paid for it because that valuation was bid higher?
THE DEAL WAS PRICED BY FIDELITY, PUTNAM, WELLINGTON, etc, etc. PROFESSIONAL INSTITUTIONS.
Cry to them if you don’t like $38 a share. They are supposed to be the EXPERTS.
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The deal was priced by MS and sold by MS plus your list. Except Wellington… they are the pro buyside… not a brokerage.
Because though Thiel’s range is startup to IPO… when that IPO craters 50% in a few months, and you still sell, it says something.
Preplanned sell date or not, plans can change and you’d think that a 50% drop would change them, unless you think that $38 isn’t coming back…
It’s useless debating Jake. There is a reason why I nicknamed him CEMENT HEAD (CH).
You guys are wrong, and you don’t know how deals are priced.
MS goes out with a range… AND TAKES ORDERS FROM THE BUYSIDE… that’s the guys I just mentioned.
If MS went out with an initial range of $24- $28 (which they did), WHO DO YOU THINK PUSHED THE PRICE TO $38??
Not the retail noobs! The alleged “pro’s” did it.
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I’m not trying to aggravate, but I do appreciate the Senator’s thorough opinion on such issues.
To say that Thiel is not different is not much of a defense. Saying he actually is different might be.
The institutions you named are EXPERTS, but unfortunately their expertise is no longer related to responsibly, or ethically discharging the traditional role ascribed to them. They are experts at abetting morally deficient executives and investors fleece the people stupid enough to believe what they say.
I’ve never found “you fucked up, you trusted me” to reflect well on the speaker.
I don’t know what to tell you. If you have a better — perhaps magic? — way of pricing IPO’s you ought to bottle that shit right up and sell it to the public.
The only thing I do know is that MS set a price for this thing, brought it to a large group of PROFESSIONAL INSTITUTIONS — people who price equities for a living — and came back with an offering price that was $10 higher THAN THE HIGH END OF THE ORIGINAL RANGE.
So, in short, don’t cry for me, fucking Argentina. The truth is, the pro’s — those fucking guys everyone thinks are the geniuses… FUCKED UP.
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How did GOOG do it?
The same way. They, however, had real cash flow and justified their valuation.
Same with MSFT and a myriad other stories. Facebook was more akin to a dot bomb valuation… early, at least.
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GOOG used a Dutch auction for their IPO.
I like how when VCs select companies to fund, they are “angels,” literally called angels.
When banks do it though, it’s expected, never at a low enough rate, and thankless.
VCs strongarm banks into selling IPOs at the highest price possible. “Oh, your bank sees $35? Ok, going somewhere else.” It’s almost identical to ratings firms selling their ratings.
The point is… VCs have avoided the spotlight, when they most definitely should not. They are retail killers.
Exactly!
Wrong! VC’s want the highest price, yes, of course.
They do not set the price, however, the dipshit institutions do.
If people who run Wellington Management and Fidelity Funds and Putnam Equity and Janus and all the rest pulled a Samberg in their pants over a hot issue, they’ve got NO ONE TO BLAME but their greedly, feckless selves.
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Jake, why are you so determined to communicate with such strong vocabulary? You habitually choose to use larger words than commonly known. The blogosphere is an interpersonal world, and this is not a scientific or technical community. Its one thing to understand words. Its yet another to use them. Being able to understand others and texts is wonderful and enjoyable. Not being understood because you your sentence structure and vocabulary are too complex, shows more about your intelligence than anything else.
Sierra Water
Seriously? Look, criticize his ideas if you feel strongly about them. But his word choice and grammar? C’mon.
Sierra, buy a thesaurus, dumbshit. I’m not going to dumb it down for your benefit.
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To be specific
I am referring to the catastrophe in the social media space, buoyed by the same assholed who have us the dot bombs.
There is a very distinct program to get liquid on America and it is done using the media, helped and financed by bankers.
Your point is pretty clear. If someone has their mind made up either way, you will not change it.
I wasn’t hugely sour on Thiel before I read this, but now recognize that yes, he/they is/are scum.
Thiel is jumping ship on $FB just like he did with PayPal. Look at what a piece of shit PayPal is.
$FB to zero, muppets.
Paypal was bought out by eBay for a shitload.
Are you saying you know better how to value Paypal than their most direct customer?
Investing involves risk, gents, and none more than at the VC level. Liquidity is king, even in that world, and a huge component of the risk equation.
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I bought Facebook. Has it bottomed? I don’t know. But I like my risk here.
I would look at that equity overhang coming in November. Buy if you like but be out long before that next billion shares comes to market.
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Thanks, will do.
Yelp looks like it’s next. Lock up expiration coming up. Damn, this thing was $28 just over a week ago.
Agreed.
There’s a guy I know, a retired Coke truck driver, who bot a shitload (for him) of FB on day one. He bragged he got shares at $41. (He’s brother of a fellow RE Broker) He knows nothing about shares or social media or anything except he was sure it would be the next GOOG. A few days later he was crying about what a scam it was and how he got cheated and all wall st are crooks and such. He was an idiot and that’s it. More power to Thiel for taking advantage of a good situation for him.
Should the SEC step in and protect poor dumb bastards who choose to buy shares?
Since when is it admirable to steal money from idiots? How about brain-addled grannies or the young and naive?
Yeah…you’re right…fuck ’em, they got what they deserved.
That’s the same type of attitude that gets these deals priced at 100% institutional levels.
Make up your mind. Do you want to participate or not? If you believe that small plebs should not participate due to the risk, then PLEASE do not whine and complain when you cannot get your hands on shares of deals that work.
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I didn’t want to participate and didn’t.
I think anyone that did wasn’t thinking straight.
I really was only saying that I can’t find it in myself to say “More power to Thiel” for his part in it.
Cascadian did. Not sure you agree with him. Maybe you do.
I am saying Thiel essentially made an investment. It’s certainly not his fault that he lucked out in his exit strategy, and got out while he could.
I do agree that if he has no more stock in the company, he should GTFO the board.
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He should have resigned from the board BEFORE he dumped all his stock, if he had any ethics.
Why?
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If only an “idiot” would possibly buy shares, why the fuck have an IPO? Don’t you think they should at least somewhat attempt to attach a fair price that even non-idiots could by? Or do you believe that “swindling idiots” is part of the job description for banking institutions?
So far I’m reading nothing seriously new excepting the intensity of the rhetoric. Thiel clearly has a right to savage the company but, he has no right to disregard his responsibilities as a Director. His actions are self-serving rather than corporate serving, another clear example of ethical failure. More disturbing is that Zuckerberg is no more than a brainy guy with a good idea, Period. In our world he knows nothing. He is a disgrace to the title of Chairman or CEO. If Thiel were really responsible he would have used his considerable grimy theiving manipulative pimp skills to remove Zucks and replace him with a seasoned executive. But that’s not the world we live in. Now it’s Thiels and thousands of others of his ilk who care only about themselves.
Zuck, with his allies, owns a majority of the company. How do you propose to remove him from the CEO job without his consent?
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The IBs had MUCH more to lose with a high valuation than they had to gain. Zuck and his wannabees pushed MS to up the IPO price.
Finance 101 trumps your confirmation bias any day of the week.
Eggsactly.
Danka.
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With you all the way here Jake
If MS had let it off at $24 (despite the massive excess demand) they would have accused of stealing from Zuck and the numbskulls would have still revved it up to $40
More interesting than this poo throwing contest – it a buy at $20?
Not with that extra billion shares coming out in November it aint.
(okay, maybe short term)
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$GSVC was the leading indicator of them all!!!! should have known…..
These things are pretty much rigged from the start. If you can’t get on via private equity (and face it, most of us can’t) you shouldn’t bother because you’ll be the one private equity sells to. It’s not like you are going to get in on the ground floor of the next great thing when you are buying what someone else richer and better connected is just now willing to sell.
What Thiel did was certainly reprehensible, and if Zuckerberg doesn’t oust him the next chance he gets he just confirms the suspicion that he is a limp dick kid who fell ass backwards into a pile of money. Some people seem to take the attitude that if it’s legal (or if you can get away with it) that equals it being morally and ethically correct. There is no reason for privileged guys like Thiel or Zuckerberg to screw retail clients over. None at all. And I’m tired of the “retail is just stupid” defense. Since when is fleecing the weak and misinformed ok? How is this good for anyone in the long run? You are just inviting the government to legislate the shit out of you because you can’t be bothered to behave ethically if it means costing you money you are never going to spend.
Never had a position in FB or GRPN or ZNGA.