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The $100M trading profit that underwriters are reported to have made by "greenshoe" short...

The $100M trading profit that underwriters are reported to have made by "greenshoe" short positions on Facebook may seem "like a giant conflict of interest," outside of Wall Street writes Fortune's Stephen Gandel, but no rules were broken and the potential trades were even disclosed in Facebook's prospectus."
Comments (4)
  • and people wonder why retail has left the market. It is completely a rigged game when MS is coming out saying the demand is hot for the stock, but secretly their working up plans to short it.

     

    Come on, this has to be as illegal as it gets. No rules were broken? Shorting the stock might not be illegal, but it sure looks like MS pushed up the price and shares sold so that it could short it.
    24 May 2012, 10:00 AM Reply Like
  • Every underwriter establishes a short in every IPO, call it a strategic short, (the other side of the bet), it is not supposed to pay off. It is there to be used mainly as a tool to control buying interest, so the shares don't run away, and also control selling interest by covering the established short thereby lifting or supporting price, stabiliteeeeee.

     

    The IPO crawfished on them forcing the short into profit that wasn't supposed to happen in the first place. Not MS fault as will become apparent shortly.

     

    This is a Faceplant issue related to mis stated, interpreted, data supplied by FP.
    12 hours before launch some body figured out "free" can only generate so much income before the tax man cometh.
    24 May 2012, 10:27 AM Reply Like
  • So when Morgan Stanley saw the stock heading south after the
    Botched opening, why didn't they immediately cover the short
    Thereby supporting the stock. They should all go to jail. Meanwhile
    Nasdaq did not acknowledge my cancellation of an oper order
    With Wells Fargo, and I wound up with an extra 2000 shares.
    See you in court.
    24 May 2012, 01:32 PM Reply Like
  • It may not be illegal but try telling that to the investors that MS sold to!
    24 May 2012, 05:44 PM Reply Like
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