A new term was introduced into the financial lexicon recently, to get 'Zucked'. The term was coined by investors in the Facebook (FB) IPO. Participants in the IPO have brought legal action against the company stating they were misled. The U.S. Senate Banking Committee has vowed to investigate assertions by investors they were hoodwinked. The stock is down over 27% since the IPO.
There have been several articles written in regard to these developments so I won't rehash the details. Suffice it to say, copious amounts of Facebook shares were sold at the high end of the price range. This maximized the windfall for CEO Mark Zuckerberg and other insiders and fashioned a far-fetched valuation for the company. Nevertheless, Facebook devotees argue that the company will eventually validate its sky-high valuation by leveraging its enormous user base and colossal amount of data collected. Continue reading "Caveat Emptor: Facebook Shareholders May Get 'Zucked'"