UhOh! from the 1%: From Chance Encounter, Path to Twitter Riches!

[BlueStreak]

3. The other side of that is the underwriters of these IPOs

Last edited Mon Oct 28, 2013, 11:43 PM - Edit history (1)

The point is that they all look at it as funny money. They arbitrarily create millions of dollars worth of shares out of thin air and that is how they pay the company that "underwrites" the IPO. And by "underwrite" what we mean is that they get on the phones and pump the hell out of the shares to try to stoke the IPO action with all their clients.

The whole thing is a false economy. Everybody involved knows it, but they are all counting on "greater fools" to pay an even higher price than they pay.

Look at Facebook. Even at a $50 share price, they have a price/earnings ratio of almost 200, where something like 20-25 is really good for a growth company. Google is 29. Apple is 13.

These deals are hysterical. Completely disconnected from reality.