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The Economics of Facebook, and 'The Hacker Way'

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911438.  Thu May 24, 2012 9:24 am Reply with quote

Neotenic wrote:
Back on the topic of Facebook's IPO, we are now seeing some discontented investors launching legal action against Facebook and the main underwriters (Morgan Stanley is currently facing the most criticism).

Yes, this is all blackly humorous.

Of course, if Facebook's share price had done what many (myself included) had thought it would do and keep climbing, we probably wouldn't be seeing these lawsuits materialise at all.

However, we would probably be seeing rather more of those relating to the technical failures that led to delays in buy orders being fulfilled.

It is funny that you should mention that, because there has been separate legal action (which is ongoing, I believe) that some customers have been overcharged for their transactions, such has been the confusion in the past few days.
From what I have seen, some, but not all, of those customers have already been paid back the surcharge, although there is still something of a backlog to deal with (and an internal investigation is being done by the owners of the NASDAQ about the breakdown in communications).

911439.  Thu May 24, 2012 9:32 am Reply with quote

Speaking as someone who has made a lot of money from investing in property: I worked hard, saved my money instead of spending it on fags, booze and drugs and invested it in order to provide for myself later in life. If I had invested in a pension I wouldn't get any benefit from it until I retired unlike now when I get an income from rent. Also, anyone who invests in a pension loses access to the capital whereas I can sell a house every 5 years or so and get a big wodge of money in the bank. Also, income from a pension ceases when the investor dies whereas I can leave the capital in my property to a relative/charity/terrorist group.

Income from an annuity may cease at the point of death, but that is not always the case.

Of course, investing in property is attractive at the level of the individual for the reasons you give (although the tax relief on pension contributions is something that doesn't really have an equivalent in property investment, and commercial property can be bought as an investment within a SIPP) - however, my point is that the benefits to you, and other investors personally, in aggregate result in pretty clear costs to others in the broader scheme of things.

This is especially true for those that are looking to get their feet on the first rung of the property ladder, as first-time buyers and first-time investors are more often than not in direct competition for the same properties.

I have no real problem with people investing their personal capital in this way - but I do have a problem with the proportion of these investments that are funded almost entirely through debts.

911487.  Thu May 24, 2012 1:46 pm Reply with quote

They're discussing the flotation on Channel 4 News and some idiot is saying how angry and offended by it all he is.

'Angry' for the people who have 'made a loss' are. How do you know they've made a loss? They're not worth what you paid for them right this minute, true, but they may very will be worth a lot more eventually, you idiots.

'Offended' by how 'unfair' it apparently is that Zuckerberg still controls the company. If that upsets you then buy the shares, could it actually be simpler?


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