The rumor-mill on the upcoming Facebook IPO sets the price per share at around $45, assuming a $100 billion valuation. Will this make high frequency traders friend Facebook? Not likely, say Edgar Perez, Adjunct Professor at the Polytechnic Institute of New York University and author of The Speed Traders, who is visiting Brazil next week to present The Speed Traders Workshop 2012 Sao Paulo: How High Frequency Traders Leverage Profitable Strategies to Find Alpha in Equities, Options, Futures and FX, February 8th.
As reported by The Wall Street Journal's Shayndi Raice, Facebook filed for an initial public offering Wednesday that could value the social network between $75 billion and $100 billion, putting the company on track for one of the biggest U.S. stock-market debuts of all time. The company hopes to raise as much as $10 billion when it begins selling shares this spring, said people familiar with the matter. Potential buyers got their first look at its financials Wednesday, which showed the company produced a $1 billion profit last year from $3.71 billion in revenues. The company derives 85% of those revenues from advertising, with the rest from social gaming and other fees.
If the suggested $45 for the price per share is confirmed by Facebook's advisory team led by Morgan Stanley, that would put its stock out of reach for most high frequency traders. While no doubt liquidity will be an important characteristic of the stock in the first weeks, as investors try to snap shares from IPO sellers, the high share price / potential profit ratio compared to other lower priced stocks (say, Bank of America) would not make it a favorite of the speed trading crowd, says Perez.
Mr. Perez is widely regarded as the preeminent speaker and networker in the specialized area of high-frequency trading. He has been featured on CNBC Cash Flow (with Oriel Morrison), CNBC Squawk Box (with Geoff Cutmore), BNN Business Day (with Kim Parlee), TheStreet.com (with Gregg Greenberg), Channel NewsAsia Asia Business Tonight and Cents & Sensibilities (with Lin Xue Ling), NHK World, iMoney Hong Kong, Hedge Fund Brief, The Wall Street Journal, The New York Times, Dallas Morning News, Los Angeles Times, TODAY Online, Oriental Daily News and Business Times. He has been engaged as speaker at Harvard Business School's Venture Capital & Private Equity Conference, High-Frequency Trading Leaders Forum 2011 (New York, Chicago, Hong Kong, Sao Paulo, Singapore), CFA Singapore, Hong Kong Securities Institute, Courant Institute of Mathematical Sciences at New York University (New York), Global Growth Markets Forum (London), Technical Analysis Society (Singapore), TradeTech Asia (Singapore), FIXGlobal Face2Face (Seoul), and 2nd Private Equity Convention Russia, CIS & Eurasia (London), among other global forums.The Speed Traders, published by McGraw-Hill Inc., is the most comprehensive, revealing work available on the most important development in trading in generations. High-frequency trading will no doubt play an ever larger role as computer technology advances and the global exchanges embrace fast electronic access. The Speed Traders explains everything there is to know about how today's high-frequency traders make millions-one cent at a time. The Speed Traders Workshop 2012 Sao Paulo will reveal how high-frequency trading players are succeeding in the global markets and driving the development of algorithmic trading at breakneck speeds from the U.S. and Europe to India, Singapore and Brazil. The Speed Traders Workshop 2012 Sao Paulo kicks off a series of presentations in the world's most important financial centers: Seoul, South Korea, March 28; Kuala Lumpur, Malaysia, April 11; Doha, Qatar, April 18; Warsaw, Poland, May 11; Kiev, Ukraine, May 18; Singapore, May 26; Shanghai, China, June 6; Jakarta, Indonesia, June 13; Mexico City, Mexico, July 27; Hong Kong, August 4, and Moscow, Russia, August 10.