This week has shown again a true example of the way the Financial Markets rule everything & absolutely everything. It’s also a very sad day for information freedom. It was the day a very large part of the time spent on the internet, users & user generated content was just privatized by the same investment banks that already own practically everything else there is of value on this plant.
This is a great example of the kind of tactics they use to gain maximum benefit from every purchase & investment as well as using their combined power to play the market at their will.
This last 2 weeks or has been the whole Facebook IPO Shenanigan. Here’s my take on what actually went down.
1. Facebook publish a shiny, pretty and dreamy S-1 IPO report. In it they publish ridiculous revenue prospects.
2. They start the IPO process and talk to prospective investors and its all too good to be true.
3. THEN, practically at the end, when everyone has to take out the wallets, rumors start about Facebook announcing some stuff…Basically, they claimed that due to their inability to monetize the exponentially growing mobile users of the site – the figures published in the report weren’t correct. The REVENUE estimates of the Business, were INCORRECT.
4. Here’s the FUNNY thing. They never actually publicly acknowledged this, apparently they had a private meeting for all the top bankers and as a result they reduced their revenue estimates.
5. May 16th, TWO Days before the IPO. I repeat, 2 days before the IPO, they add an additional 25% of the Shares for Sale.
Ohhh my god. This is probably the most textbook case of stock market manipulations. So, once again:
[h3]What Really Happened[/h3]
1. Facebook is a hot new thing, everyone wants a piece of them, expected demand for shares is through the roof = shares are expensive.
2. Scandal + Flooding on market with so many extra shares = Price Falls.
3. At a lower price, more mom & pop investor’s can buy the shares, but also the same investment banks can now have more shares at the same price.
[h3] So? [/h3]
And don’t get me wrong, I’m not implying Zuckerberg is an evil, plotting villain. He has a board of directors that make most of the decisions for him now – he is simply become a part of the system.
The problem for us, is that now Facebook HAS to act in the interest of their ‘new owners’. If they don’t, their shares fall and people start getting fired – until the company is back to making their desired levels of profit. I anticipate even worse privacy infringements, unethical ad targeting & complete lack of morality.
Ohh, not to mention that probably half the world’s photos belong to the most greedy & power hungry people on the plant.
Good job guys! You now bought a very fat chunk of the internet. The fight goes on.
Here’s where I got my facts: