{"id":15617,"date":"2012-05-23T16:39:13","date_gmt":"2012-05-23T16:39:13","guid":{"rendered":""},"modified":"2012-05-23T16:39:13","modified_gmt":"2012-05-23T16:39:13","slug":"facebook_falls_facedown_regime_targets_morgan_stanley","status":"publish","type":"post","link":"https:\/\/admin.rushlimbaugh.com\/daily\/2012\/05\/23\/facebook_falls_facedown_regime_targets_morgan_stanley\/","title":{"rendered":"Facebook Falls Facedown, Regime Targets Morgan Stanley"},"content":{"rendered":"

RUSH: The Facebook IPO. Ho-ho-ho-ho! Oh-ho-ho-ho-ho! Somebody\u2019s gonna have to pay for this. These are Obama\u2019s buddies at Facebook. (interruption) Well, because the bottom\u2019s falling out. They can\u2019t maintain the initial price, the 38 bucks. (interruption) Right. Well, okay. So somebody\u2019s gonna have to pay the price for this. Somebody\u2019s gonna get the blame for this. You can\u2019t have these people losing Obama money like this. That can\u2019t happen. You can\u2019t blame Goldman Sachs. They\u2019re underwriters. They were in for $500 million at the outset, before the IPO.<\/p>\n

You can\u2019t blame Goldman Sachs because they\u2019re Obama buddies. And you can\u2019t blame JPMorgan Chase. They\u2019re Obama buddies. But Morgan Stanley? A-ha! We have our target. Morgan Stanley is soon, if not already, going to be under investigation by the SEC for not being truly forthcoming about changes Facebook made in its prospectus. See, Facebook made a profound admission. It\u2019s another thing I told you last week. In fact, it might have been Monday. When you ask about Facebook, I said, “Of all the stuff that\u2019s been said about Facebook…”<\/line><\/p>\n

BREAK TRANSCRIPT<\/p>\n

RUSH: I\u2019ll tell you, the poor Facebook people. I think they need to change the name of the company from Facebook to Facedown. It\u2019s not pretty, folks. It really isn\u2019t pretty. And I tell you, only 25% of the shares were made available to the public. The majority of shares were being bought by the institutions: The hedge funds and mutual funds, the repositories for pension funds and all this kind of thing. Oh! I\u2019ll tell you the way the regime is looking at this.<\/line><\/p>\n

They\u2019re looking at this and they\u2019re saying, “We gotta find a Wall Street bank to blame! It\u2019s right there. It\u2019s made-to-order for the campaign! We\u2019ve gotta blame a Wall Street bank for this.” It\u2019s gonna be Morgan Stanley. Even though JPMorgan and Goldman did the exact same thing that Morgan Stanley did (they revised their views on Facebook\u2019s IPO the day before), it\u2019s Morgan Stanley, which is not a Democrat-oriented firm, that\u2019s gonna take the hit.<\/p>\n

Is Facebook too big to fail?<\/p>\n

Is it too big to succeed?<\/p>\n

Who knows?<\/p>\n

BREAK TRANSCRIPT<\/p>\n

RUSH: So what happened? Thursday of last week… I think it was Thursday of last week (it might have been Wednesday), Facebook changed their prospectus, and when they make a change to the prospectus, the public is supposed to be informed of it. And all the underwriters were told of the change to the prospectus. And the change to the prospectus was a very important change because the Facebook guys admitted that many of their users are now mobile users.<\/p>\n

They\u2019re accessing Facebook not from the Web (or not from their desktop computers or their laptops), but from their mobile devices such as their iPads or telephones. And then they said mobile advertising, Facebook mobile advertising, has not shown strong results. This should have resulted in a lower share price, and at least a warning to people that there was a problem here; that this was not golden IPO that everybody built it up to be. And not just this mobile advertising business.<\/p>\n

I feel like a lone wolf on this \u2019cause everybody\u2019s trying to, you know, blame a Wall Street bank and Morgan Stanley here for a number of things. But Facebook had a bigger problem than all that: When General Motors pulled their advertising saying it didn\u2019t work. Folks, that\u2019s all Facebook has. They\u2019ve got 900 million users, but how do they generate revenue? They sell advertising! If General Motors pulls back and then publicly says, “Our advertising didn\u2019t work, and that\u2019s why we\u2019re pulling our ads,” that\u2019s the biggest red flag in the world, and it was out there for everybody to hear.<\/p>\n

And I\u2019ve noted that the really smart people in the financial community are saying, “Well, yeah, that might have been a little factor. But really, there are more formulaic problems here with the IPO. The share price, the number of shares.” I think all that\u2019s academic. When your number one fundraising tool is said publicly not to work by a major advertiser, I think that\u2019s all the problem you need. And then Facebook doubled down. Well, they didn\u2019t double down. They had to admit it.<\/p>\n

When they changed or amended the prospectus to say that more and more of their users are using mobile platforms and that advertising in the mobile platforms is really not showing any results, they had to. And I guess the underwriters are being looked at and investigated here for not making public the change to the Facebook prospectus. Facebook did what it was supposed to do, even though their chief financial officer is also under investigation.<\/p>\n

<\/a>AP has it: “Regulators are examining whether Morgan Stanley, the investment bank that shepherded Facebook through its highly publicized stock offering last week, selectively informed clients of an analyst\u2019s negative report about the company before the stock started trading. Rick Ketchum, the head of the Financial Industry Regulatory Authority, the self-policing body for the securities industry, said Tuesday that the question is ‘a matter of regulatory concern\u2019 for his organization and the Securities and Exchange Commission.<\/p>\n

“The top securities regulator for Massachusetts, William Galvin, said he had subpoenaed Morgan Stanley. Galvin said his office is investigating whether Morgan Stanley divulged to only some clients that one of its analysts had cut his revenue estimates for Facebook before the stock hit the market on Friday.” And that\u2019s because of the mobile advertising claim. So, as far as the regime is concerned… The SEC is the regime. As far as they\u2019re concerned, a Wall Street bank has to be to blame.<\/p>\n

Now, Morgan Stanley did the same thing that JPMorgan and Goldman did, Goldman Sachs. All three did the same thing. Now, Morgan Stanley was a primarily underwriter, there\u2019s no question. All three revised their views on Facebook\u2019s IPO, just like Morgan Stanley did. But the claim is that Morgan Stanley didn\u2019t tell everybody, just a select few. So they\u2019re being looked at. It\u2019s also worthy of note that Morgan Stanley, among Wall Street banks, is among the least supportive of Obama in terms of donations. <\/p>\n

BREAK TRANSCRIPT<\/p>\n

RUSH: Headline: “How Zuckerberg Cashed in $1.13 BILLION Worth of Shares Before the Stock Cratered.” He did. Zuckerberg, as soon as he could, sold a bunch of his shares after the IPO, before the stock cratered, at $1.13 billion. So did some others. Pete Thiel, who started PayPal, who had given Zuckerberg 500 grand early on to help get started. I didn\u2019t read this whole story. It prints out a long way, and I\u2019d be surprised if this story doesn\u2019t mention it at the end, but this was all in the prospectus. Zuckerberg did not do anything that was not known. The prospectus said that Zuckerberg and a number of others were gonna sell their stock, a portion of it. He was worth $19 billion after the IPO, at 38 a share he was worth $19 billion. It\u2019s not that now, but he\u2019s still worth multiple billions even with the share price where it is. <\/p>\n

But the prospectus was very clear that Zuckerberg and some of the others were going to sell. He didn\u2019t do anything in a secretive manner. He didn\u2019t run any kind of a scam, no. He didn\u2019t do something that people weren\u2019t aware he was gonna do. This is what happens. This is one of the reasons why there are IPOs. He\u2019s the founder. Up \u2019til now all he\u2019s had is paper money. The company had not been monetized. It was always a company on the come. Now, I think Goldman Sachs put $500 million into it. I remember when that happened everybody was trying to value the company. What is this company actually worth? Everybody remembers the dot-com bubble when there was no “there” there, all these dot-com companies. And for the longest time, people thought that of Google, when the Google stock price was 500, 600 bucks, still is, what are they? Well, they\u2019re an advertising company. And that\u2019s what Facebook was gonna be, but they\u2019ve got big problems. <\/p>\n

But Zuckerberg selling some of his stock, $1 billion worth, was part of the original prospectus, part of the deal. There was nothing chicanerous about this. I\u2019m just telling you. Everybody missed this. When General Motors pulled out, said we\u2019re no longer advertising, that, to me, was the biggest red flag about this that anybody could have told me. If a prominent government-owned company, a buddy of Zuckerberg, Obama, claims that Zuckerberg\u2019s advertising doesn\u2019t work, head for the hills.<\/p>\n","protected":false},"excerpt":{"rendered":"

RUSH: The Facebook IPO. Ho-ho-ho-ho! Oh-ho-ho-ho-ho! Somebody\u2019s gonna have to pay for this. These are Obama\u2019s buddies at Facebook. (interruption) Well, because the bottom\u2019s falling out. They can\u2019t maintain the initial price, the 38 bucks. (interruption) Right. Well, okay. So somebody\u2019s gonna have to pay the price for this. Somebody\u2019s gonna get the blame for […]<\/p>\n","protected":false},"author":14,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","ngg_post_thumbnail":0},"categories":[],"tags":[],"yoast_head":"\nFacebook Falls Facedown, Regime Targets Morgan Stanley - The Rush Limbaugh Show<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.rushlimbaugh.com\/daily\/2012\/05\/23\/facebook_falls_facedown_regime_targets_morgan_stanley\/\" \/>\n<meta name=\"twitter:card\" content=\"summary\" \/>\n<meta name=\"twitter:title\" content=\"Facebook Falls Facedown, Regime Targets Morgan Stanley - The Rush Limbaugh Show\" \/>\n<meta name=\"twitter:description\" content=\"RUSH: The Facebook IPO. Ho-ho-ho-ho! Oh-ho-ho-ho-ho! Somebody\u2019s gonna have to pay for this. These are Obama\u2019s buddies at Facebook. (interruption) Well, because the bottom\u2019s falling out. They can\u2019t maintain the initial price, the 38 bucks. (interruption) Right. Well, okay. So somebody\u2019s gonna have to pay the price for this. 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