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You Are Here: Home » Featured News, Finance » Investors Lost Money, While Morgan Stanley Earned $100 Million Defending Facebook IPO

Morgan Stanley FacebookBloomberg spoke with several American investors who invested in the initial public offering (IPO) of Facebook (NASDAQ:FB) hoping to make money but lost thousands of dollars, while the Wall Street Journal found that investment bank Morgan Stanley, the main underwriter, so far won 100 million dollars in transactions to regulate the course of Facebook shares. Facebook offer, the expected transaction of the year, produced waves worldwide Friday when the company was valued at 104 billion dollars and managed to raise 16 billion dollars from the stock market for the company and major shareholders. Then two days of horror followed for investors, as the price plummeted from $38 to $32, and many of those who subscribed in the offer were left with huge losses.

Bloomberg tells the story of some of them. For example, a data systems manager in Louisiana aged 34 years, has invested about $4,000 in Facebook stock, his paycheck for a month, hoping to increase his personal pension fund value. Price development destroyed his expectations. In total, retail investors have subscribed about 25% stake in Facebook tender, about 4 billion dollars, writes Bloomberg. Their investment decreased by 630 million dollars, taking into account the price from yesterday.

On the other hand, Wall Street Journal writes about Facebook bid winners, the investment banks. Morgan Stanley and other banks involved in the offer would have earned about 100 million dollars in share price stabilization operations conducted from Friday to yesterday. The result was that the price dropped from $38 to $32. Morgan Stanley and other banks involved in the Facebook offer have earned  aggregate commissions of 176 million dollars from the sale of shares in the IPO.

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