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Technology Stocks : Meta Platforms, Inc. (Facebook) -- Ignore unavailable to you. Want to Upgrade?

To: Glenn Petersen who wrote (535)	5/21/2012 10:00:16 AM
From: Wayners	Read Replies (1) \| Respond to of 3790

The real key is what did the underwriter pay for FB shares for the overallotment, let's day $28 but I bet it's in the single digits. They sold those for $38 before the opening of trading, they buy them back for $38, as long as they resell them for more than $28 they still make money, just not as much money.

To: Glenn Petersen who wrote (535)	5/21/2012 10:08:32 AM
From: Wayners	4 Recommendations Respond to of 3790

Here is a neat trick I always like to use with IPOs. You can use Fibonacci in reverse to find support levels. There are what I call ghost prices before any IPO ever opens for trading. How do you find the previous ghost high or low? Take your fib drawing tool and take the low of the solid body of the first day and draw backwards in time until the .382 line aligns with the top of the solid body. That gives you the upside target. For a downside target put the fib pointer on the top of the solid body for day one and draw backwards in time until the .382 line is at the low of the solid body for day 1. Using this method on FB I get a low of about $31.60. You can also use the high of the day instead of the solid body, and I get a low of about $27....it gets more accurate after about the first week as you typically see some kind of range for the first week then just apply the same method for the first week's solid body. I've been dumbfounded with the number of example of IPOs this method has worked or helped me take profits when necessary.

To: Glenn Petersen who wrote (535)	5/21/2012 11:10:59 AM
From: Savant	1 Recommendation Read Replies (1) \| Respond to of 3790

Over allotment use... near as I kin recollect, underwriters can short the IPO, and use the OA to cover. Say, short it over their cost and cover in the market...to 'show support', or help maintain the price....for a while. In that case, they wouldn't need to tap the OA, but could 'show support' by buying in the open market. However, should the price continue upwards, the OA is there to 'protect' their short position, or alternatively, for them to exercise (purchase) and subsequently sell into the market...for a guaranteed profit. Additionally, they could short the higher price, and then distribute (sell) the OA shares to (favored) others, again, with a profit locked in. F. Over-Allotments and Lay-Off Sales Rule 201 exempts short sales by underwriters or syndicate members participating in a distribution in connection with an over-allotment. It also exempts lay-off sales by these persons in connection with a distribution of securities through a rights or standby underwriting commitment. kattenlaw.com A blurb about Morgan Stanley et al. bbc.co.uk I recall back in the hi flyin' IPO days, more than one underwriter was slapped by SEC for using customer accounts to do buy ins to run up the price. Anyone feel free to disabuse me of my notion, should it be incorrect these days. Best, S.