MediaFile

Wall Street needs to shed Facebook’s shroud

As Facebook continues its search for a bottom after only eight trading days as a public company, there’s a much bigger problem than the $40 billion in market cap it has lost. The people behind Facebook’s dubious $100 billion-plus self-valuation were apparently as doubtful as the rest of us. At stake is the fate of Wall Street’s soul. To paraphrase Sir Thomas More’s line in A Man For All Seasons: “It profits a man nothing to give his soul for the whole world…” – but for Facebook?

Facebook’s interests are no more aligned with The Street’s than with its members‘. Wall Street needs to take the offense, see the handwriting on the wall and project itself as the ultimate defender of transparent, market principles, which is the only asset it has.

Facebook’s much-anticipated public launch has gone from bad to worse. It priced itself at the high range of $38 and opened 30 minutes late – some 20 of those with traders completely in the dark. Nasdaq has egg on its face and a possible liability in the tens of millions of dollars. Retail investors who bought into the hype are still losing money. Days after the May 18 launch, the tangled mess of positions that may or may not have been taken were still being unwound.

The Facebook fiasco revives the oldest knock against The Street: The little guy doesn’t have a chance. IPOs only reinforce this impression. Retail investors have little or no access to a roadshow, and roadshow presentations are borderline farcical anyway. (Did you catch any important financials in that Facebook roadshow video?)

But Facebook was worse than most. Three days into its roadshow, on May 9, Facebook added some bad news to its main regulatory filing. About one-third of the way into an amended filing with the SEC, Facebook speaks to the most important pillar of its revenue prospects:

Lots of IPOs, just one Nasdaq bell

Nasdaq’s senior vice president of new listings and capital markets has some bad news for companies looking to hold an initial public offering: don’t expect to ring the opening bell.

The backlog of companies looking to list in the next few months is so big that “I’m going to disappoint a lot of people,” said Robert McCooey during an IPO panel at the Ernst & Young Strategic Growth conference.  “Some people won’t even get a closing bell ceremony.” He counts 210 companies hoping to list on public markets.

It’s not just the successful IPO of Groupon last week that has changed sentiment. It’s the better — if not outright good — economic news in recent weeks, along with a solid earnings season, that is creating momentum, said David Erickson, co-head of equity capital markets at Barclays Capital. He said the firm was currently working with four companies that hoped to set IPO prices by Thanksgiving, in little more than two weeks’ time.

Tech wrap: Is Groupon’s IPO window closing?

As the Nasdaq Composite index continued its week-long tailspin, tech investors and analysts are wondering what the stock plunge could mean for the pending IPOs of companies like Groupon and Zynga.

The coming week, which has about a dozen IPOs scheduled to price, will be a good test of the severity of the selloff, according to Nick Einhorn, an analyst at Connecticut-based IPO research house Renaissance Capital. “Less mature, less profitable companies could have a tougher time going public,” Einhorn told Reuters.

If there was to be another recession, writes Investor Place’s Tom Taulli, “the IPO market will freeze up. It will mostly be only standout companies – such as Zynga and Facebook – that will get traction. A company like Groupon, which has substantial losses, may have to delay its offering or cut the valuation.”

Carol Bartz! It’s You!

Yahoo CEO Carol Bartz was right by the Reuters office this morning, ringing the morning bell at Nasdaq on 43rd Street and Broadway, so I ran down to catch a glimpse and lob a few questions at her. With all the buzz about Yahoo’s new marketing campaign, which is set to be unveiled tomorrow, I asked Bartz if she was excited.

“Excited? I’m so excited about it, I could do a Yahoo yodel,” she said. But then, she didn’t oblige. Bartz did say New Yorkers will see splashy Yahoo signs and other gimmicks over the next few days. But it’s not just New York.

The campaign, which the New York Times says is backed by a $100 million budget, will be launched all over the world, Bartz said. We’ll have more on Tuesday, when Yahoo executives tell reporters what they are up to. Until then, here’s a sneak peak courtesy of The Wall Street Journal, which says the campaign tagline is “It’s You!”.