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Facebook–I roll my eyes!

I’ve been working in my office with CNBC on in the background. I just can’t resist the Facebook IPO disaster – it’s like watching a train wreck. Let’s just count the concatenation of errors, stupidity, ethical lapses, insider trading, class action lawsuits, and maybe even criminal fraud. So let’s see what has come out so far:

1) The largest IPO on NASDAQ was delayed for undisclosed reasons.
2) When it opened the NASDAQ computer systems could not keep up with the transactions.
3) Many traders cancelled orders in the milliseconds prior to the opening.
4) Many buyers did not know what or how much they had bought or at what price and some still don’t.
5) Many buyers with double secret probation stock couldn’t sell and lost money they didn’t even know was committed.
6) On the first day the stock peaked above 42 and then quickly dropped to the offering price. Volatility still continues.
7) A few days later it was revealed that high velocity traders made significant profit on the NASDAQ system delays (some in milliseconds) while real investors lost big.
8) Also a few days later it was revealed that a Morgan Stanley analyst revised revenue projections sharply downward just a few minutes before the IPO but only revealed this to big customers of Morgan Stanley.
9) As of yesterday, Facebook had lost $40 billion.
10) There are now Congressional, SEC, and state Attorney General investigations, class action lawsuits, and growing doubt about Facebook.
11) All of this occurred in an environment of greater regulation than we have ever seen in this country.

ARE THERE NO ADULTS ON WALL STREET?

DID NOBODY THINK ABOUT CONSEQUENCES, THE APPEARANCE OF FRAUD, AND INSIDER TRADING?

WILL THE GOVERNMENT USE THIS (AND JP Morgan/Chase’s trading stupidity) TO REGULATE EVEN MORE?

So, how do we fix this? I have a couple of ideas but would appreciate yours too:

1) Short term. Allow any buyer who acquired at the IPO to sell at breakeven. Morgan Stanley, the other underwriters, and NASDAQ to take the hit. The class action suite may make this happen.

2) Do something to destroy the advantage of high velocity traders by only allowing combined trades every second or so and insist that the information get to everyone at the same time. (Would this do it?)

3) Replace complex, compliance-heavy, and confusing regulation with a short list of simple, clear laws, which re-establish the stock market as a place to invest, not gamble (not that I believe Congress can actually act adult enough to do this).

Thoughts?

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Blog sourced book

I’m working on a book–actually 3. No not the one on Afghanistan–that’s almost finished. No, Janet and I are writing 3 quick to market books to focus thoughts for the election, sourced by blog and internet research. Here’s the idea–little examples that point out how truly bad our government has become–hopefully funny or OMG I can’t believe it’s really real ones. Give me examples–I’ll credit you in the footnotes! Here are the books.

“Resolved: Congress shall pass no really stupid laws”. Stuff passed by Congress, or regulations, or state, or local laws, ordinances, regulations that just are stupid or that should have gone away with a long time ago. Paul Dickson wrote a book like this called “The Official Rules” in 1978. Ronald Reagan read some really silly ones. I remember the OSHA regulation, which stated that “Wet manure is slippery”. Or the Helium Reserve for airships, which Reagan thought should have been done away with in 1980 but which lasted well into the 90s–and then was sold off for balloons at a price much less than cost.

“Money for Nothing”. How the government wastes, steals, gives away, or just flushes our hard earned money down the toilet” Give us the most absurd bridges to nowhere, tread-milling shrimp, or sexually active rats on cocaine. And of course how politicians steal elections to obtain the power to steal our money.

“Creeping Tyranny”. Not so funny, here are examples of how the government has limited our liberties–often in the name of protecting our rights, security, health, or welfare. Again, examples from the last 20 years, please.

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Carthage Intellectual Capital Management–New Website

Our new company, Carthage Intellectual Capital Company, has just gone live on our new website, CarthageIC.com.

We created Carthage to help companies recapitalize using the value hidden in their intellectual property. Through a new investment vehicle, a sale/license-back of their IP, such as patents, a company can bring in cash without diminution of the protection those patents can afford. Investors can realize high returns, secured by the IP.  We have just published our first newsletter; you can find it and our blog at CarthageIC.com.

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First post on Ben’s shiny new WordPress blog site

Having tired of blogging on other sites I have set up a weblog of my own. This is the first post on my new WordPress site–come visit me at www.benbrink.com. Let me know what works or is broken; I’m a WordPress newbie.

Hopefully the widgets work and these are auto-posting to LinkedIn and Facebook and happy tweets are being made to herald their existence.

The things I expect to rail about regularly are: our current war and national strategic issues; politics–I support Gov. Mitt Romney for president and like Ron Paul’s libertarian philosophy and forthrightness; business issues, economic environment, add  ethics; and veteran employment.