I haven't talked about the Facebook debacle but if you were watching any of the market coverage today even the national evening news (if anyone watches that any longer) you couldn't miss it. Zuckerberg in the first two days of trading this week is down a cool $3 billion.
The story today was all the back and forth action of whose fault it was when trades were mishandled on Friday by the NASDAQ, who had inside information as the underwriters of the stock came out with with analyst coverage today which offered lower guidance basically saying the stock was overvalued.
This morning I was listening to a CNBC interview with Bill Hambrecht who is an investment banker and was al lead on the Google IPO. Hambrecht gives a good overview on how the IPO process works and discusses the "greater of fools theory". The theory goes that the individual retail investor gets sucked into buying a stuck after the IPO pops while the insiders are selling to get their money back out. In order to make any money you have to find a buyer willing to pay a higher price despite fundamentals.
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