Notice – New Prospectus and Offering Closing to New Investors
ON MAY 15, 2012, FACEBOOK, INC (“FACEBOOK”) FILED AMENDMENT NO. 7 TO
ITS REGISTRATION STATEMENT TO PROVIDE A REVISED PRELIMINARY PROSPECTUS.
THE PROSPECTUS IN AMENDMENT NO. 7 REVISES THE DISCLOSURE IN THE MAY 9
PROSPECTUS, CONTAINED IN AMENDMENT NO. 6, TO REFLECT THE INCREASE OF THE
PRICE RANGE (PREVIOUSLY $28 TO $35) TO $34 TO $38.ADDITIONALLY, AS OF 4:00 PM EASTERN DAYLIGHT TIME ON 5/15/ 2012,
E*TRADE WILL NO LONGER BE ACCEPTING NEW CONDITIONAL OFFERS FOR THE
FACEBOOK IPO. CANCELLATION AND MODIFICATION OF EXISTING CONDITIONAL
OFFERS ARE STILL PERMITTED.
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The price range increase shows significant pre-IPO retail investor demand despite the lack of interest by institutional investors. The closure of accepting new conditional offers by E*TRADE itself, 2 days prior to the actual pricing, means they are going to try to accommodate some of this demand for those who provided conditional offers within the new price range with their allotment. Since my $40 offer is still on the very high end, I’m a bit more optimistic that I will at least be allocated some shares (if I can snag even 100, I’ll be satisfied).
If this speaks anything for the pre-IPO demand, one can only imagine what the demand will be like on the secondary market after the primary opening print hits the exchange when the stock will actually begin trading. As mentioned previously, strong initial demand could push the actual opening price on the NASDAQ up to over 100% of the final IPO pricing (which takes place after the bell on May 17th). Which is why buying an IPO once it begins public trading, is insane because you will most likely end up underwater if you do not buy and sell at the right time. A 75% gain will cause plenty of hedge funds who acquired shares at the IPO price to flip their shares that day for a quick profit. Day traders will play the volatility that will ensue throughout the day where they can make 10-20% a shot.
Previously, I mentioned I would hold for at least 30 days (if I do manage to get some shares). I’m re-evaluating this now, because this is stacking up to be a potential bet to quickly double my speculative “investment” (which I can then re-direct into even more AAPL which is range bound at the moment). The lack of institutional investor interest (many of whom are waiting to see how well Facebook does as a public company for at least a few quarters before taking a position) changes the dynamics of the entire hold/stand-off periods.
