Fly Sell: WNR

I sold out of WNR, near the highs.

Apple versus Facebook.

Apple wins.

Facebook is being marginalized and ignored by the overall market and more importantly, the social media space. I added to my fucking gigantic YELP position, not because I think it is going higher. Instead, I know it is.

My MTW caught a Goldman upgrade this morning, citing the stock being cheap as balls. Thus far, I am up around 0.75% for the session, eagerly waiting for YELP to reverse and go higher.

In general, the market looks like it wants to run. If you are looking for names, consider silver, as it correlates tightly with the SPY off bounces, with vigor and leverage. After silver, you will want to target tech names, specifically semis and networkers. Names like CIEN, RVBD, SNDK and even AAPL are of great interest to me. You cannot let this bounce escape you, for we may not get an oversold condition like this for the remainder of 2012 (although I doubt that). Nevertheless, the future has not been written yet and for all we know, Greece will be saved (again), Romney will gain traction in the polls and the economy will accelerate to the upside.

With my money, I am actively seeking to position in oversold names with large short positions.

More on that later.

First the company was supposed to come public at $28; then they upped the price range to $34-38. That wasn’t enough for the insiders and greedy underwriters, who collected bountiful fees (1.1%) based on the size of the deal, so they sweetened the pot. Said pot wasn’t sweetened for the unknowing public, who listened to sweet melodies of Facebook’s web dominance by the propaganda outfit known to you as CNBC. The pot was saccharined for the direct benefit of selling insiders, who put an additional 25% more shares on the market, to be dumped at the ipo price of $38– valuing the company at $104 billion. Just a few weeks prior, the company was allegedly worth just $96 billion, according to lead underwriter Morgan Stanley.

What’s $8 billion between friends, no?

The sophists on the television paraded well known venture capitalists and stupid pundits onto the tube, who praised Facebook as the next Google. They only had pleasantries for Facebook, things to do with the social media giants 900 million userbase and how they haven’t even scratched the surface in a seemingly endless pool of online advertising dollars waiting to be had.

Facebook was the answer to the Greek crisis, market malaise, promised by all to usher in an new era of American excellence.

The “generosity” of the lead underwriter, Morgan Stanley, and the selling Facebook employees/venture capitalists, continued until the very night prior to going public. The $18.4 billion raised by the ipo would have record retail participation.

What does that mean?

That meant Joe Schmoe with $50k at E-trade was allocated shares. That meant the ipo was not exclusive to institutional clients, for some odd reason. Maybe they just wanted to help the little guy out?

Lo and behold, upwards of 25% of the Facebook ipo was allocated to the unwashed, brainwashed and sedated public, who believed every word of sweet hominy molasses spoken by the journalists at CNBC. The stock opened at $45 and was quickly “sold to you” by institutions. Every brokerage firm I know, who was given 1 million shares or more, sold every single share at or near the opening tick.

The stock plummeted within minutes, causing a ripple effect in the market, sending the shares of fellow social media stocks lower, in horrific, pinless hand grenade fashion. Investment company SVVC traded below cash, swooning more than 27% in a single session–all because they owned 600,000 shares of FB at $31.

The syndicate then scrambled to save face. They feverishly bid for the stock with millions of shares, also having to deal with unprecedented software glitches at Nasdaq, which caused trades to go unreported for hours–putting traders in the dark. If Facebook’s ipo price fell below $38 on its first day of trading, they would have been exposed for thrusting a great crime upon the America people, through the outrageous pricing of a hyper-marketed ipo onto an unsophisticated investor.

At $104 billion, Facebook traded more than 25x sales. In comparison, social networking company YELP, who is often ridiculed for being overvalued, trades at about 12x.

The rest is history. Today, the market opened and the syndicate could not control the purblind mobs of angry and beguiled retail investors, who were hitting the bid in an effort to salvage their investment, burned badly by the fucking investment banks–yet again. Within 15 minutes of trading this morning, Facebook was down $5 or 13%, staggering an already injured retail client base and lighting fire to an already scorched social media space.

In all of my years on Wall Street, I’ve seen plenty of bad deals. Usually at boutique deal shops, ipo’s would trade flat its first day and sustain that level for weeks, if not months, afterward, before dropping. Most honest brokers avoid those deals because there is no incentive to put client money into an ipo that will likely trade flat, unless of course said broker is only interested in a concession. But this Facebook ipo steals the cake. This deal was worse than any bucket shop deal I’ve ever seen. What makes it exponentially worse is the size of the scam and the money it literally stole from retail investors.

If this deal was priced at $28, with the original amount of shares, everyone would have made money. Retail would have been happy. The market would have gone higher and the social media sector would not have been ravaged to drill bits. Instead, we got more of the same from Wall Street: greedy fuckheads who pushed the envelop and LOST (again), not only tarnishing their reputation in the process, but damaging the repute of America worldwide–viewed as a bunch of fucking gunslinging piggish idiots who cant’t even celebrate the public offering of their most popular, lauded and successful American company with a fair deal.

One day those fuckers will get what they deserve. We all do.

NOTE: Insult to injury- Morgan is likely short 63 million shares of FB at $38.

http://www.youtube.com/watch?v=d9CQXMNko8Q

In the midst of all of the turmoil, after all of the shame the Facebook ipo has inflicted upon the American people, the WNR stood tall. It stood tall in a sea of green, as investors reversed early losses into a full-fucking-rout of the bears, in pleasant “fuck you, you’re dead” afternoon trading.

My positions closed much higher for the day. But more impressively, I was able to shift 15% of my old man money into high beta crack juice, just prior to some pretty big runs. The thought process was very simple for me today. The price action in YELP, ZNGA, MTW, NXPI and AAPL have been so nonsensical, so unbelievable, the only reasonable course of action was to buy and buy big.

Look, YELP was down 25% in two days when I averaged down today. It used to be 30% of my assets. However, since the decline, let’s just say the market has reduced my weighting in YELP to a degree that I was able to buy more.

My best picks into a full fledged sentiment reversal are EXK, AG, YELP, MTW, AAPL and ZNGA. But the truth is, I like everything here and have all of my positions listed inside of The PPT, for your perusal.

http://www.youtube.com/watch?v=pifrWs18AiU

Some of my earlier ballsy moves are now starting to pay instant dividends.

ATTENTION BEARSHITTERS: prepare to switch positions and feel the sharper end of my blade, starting with YELP.

I never gave a fuck. You didn’t think I’d get shaken out, did you?

I sold most of my KMB, LNCE, PEP, ABV and WM to buy more YELP, NXPI, EXK, AAPL and MTW.

In addition to that madness, I started a small position in ZNGA, GLW and RS.

This is a perfect scenario for the bears. Thanks to all of the fucking hype surrounding the Facebook ipo, coupled with the brainless pricing by its underwriters (fuck you Morgan Stanley, I hope you go to zero), the market’s fate is now tethered, mind you, to the fluctuations of Facebook’s stock–currently in “knife your face” mode.

That’s right. Nothing else seems to matter now, except for the share performance of FB. Look at closed end fund, SVVC. They just announced owning 600,000 shares of FB from $31. They also reported to have more than $19 in NET CASH on hand. Meanwhile the stock was down 26% on Friday and down some more in pre-market, trading BELOW cash. Does that make sense?

Once again, the entirely of the social media space is being sold off, thanks to the Facetrap.

The more I read about Greece and Europe, the more somber I get. I think it’s fair to say, the doom and the gloom is certainly starting to sink in. Just a short while ago, the market could do no wrong. Now we’re on the cusp of an unprecedented melt-down.

Starting immediately, should this market refuse to bounce, I will be forced to hedge my longs. I know that sounds reactionary. But remember, crashes don’t occur from overbought levels, but extreme oversold levels. I can’t afford to sit by and watch my assets shrink, thanks to the excesses of some greedy underwriters and a totally bankrupted continent of Europe.

The Return of Samsonite Hamburgalar
by: The_Real_Fly

Related: Samsonite meets with Fly

You do understand how superficial the stock market is, right? People in the real world, working 12 hours a day to pay for their inflated rents couldn’t give two shits and a gay mule about Greece or the Nasdaq. There are the unlucky ones, who for some reason have been targeted by disease, whose only wish is for a “good day” and are totally ignorant to Facebook’s great big ipo blah.

For us, traders, money managers, pundits etc, the market is everything. We watch it with a crazed intensity, obsessing over every movement. We venture off to blogs and “streams” to measure our dicks to the other traders, telling them that they are “shit” and we are “the shit.” On those streams, obsessive overlords fixate on rules and appearance, all to appease their corporate hack clients.

It’s all shit.

This whole big dog and pony show is orchestrated chaos. I am having an exceptionally difficult time making sense of this because the rules keep changing, correlations that once existed have vanished, paving the way for newer nonsensical ones. Since when does an industry leader in its prime come public and ravage the share prices of its peers by 10-25% in a single trading session? You tell me.

Of course, those of you with your penises exposed, ruler in hand, will cry they were a bubble. However, if LTRO2 was announced on Friday, you’d all be down 20% by Monday, you and your stupid shorts. Pray tell me, bold jackass from the interwebs, how do you plan against another Fed or ECB statement, or even Chinese central bank action, that will once again attach fire to the faces of those in the FAZmobile?

Answer: you cannot.

The problem that most people have, when investing in this market, is greed. We’re all chasing the high stakes commodity or tech names, hoping for a quick 20% pop. Meanwhile, stocks like KMB, PEP, CHD and others, are steadily climbing higher, not giving a fuck about Europe, at all.

How am I supposed to justify staying long with Europe devolving into chaos, TLT north of $124, whilst commodities and stocks are in crash mode?

The answer is naively simple: I’ve been trained to expect a bid from the Fed or ECB. Over the past 4 years, I’ve witnessed crazy shit and just when I thought there was nothing that could be done to save “the system”, BAM!, the system got saved. Perhaps this is “the big one” and perhaps I will finally get what’s coming to me. I’ve dodged so many bullets, these past 4 years, it’s only a matter of time before one hits.

Nonetheless, my position is more tenuous than ever before, despite still being up 2% for the year. I feel as if a wave is about to come crashing down on my head and I’ve resigned myself to face it head on, instead of wavering for shelter.

6 mo carnage of GARP index in The PPT (these are “value plays”, down 20% in recent weeks, approaching 6 mo lows)

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