UPDATED May 21, 2012 3:00pm:
Ingrid Lunden. “$16B Should Cover It: Here’s The $15B Facebook Privacy Class Action Suit, And Facebook’s Response.” Techcrunch, May 18, 2012. Accessed May 21, 2012. This article does not take into account the undisclosed liabilities associated with Facebook’s adjudicated “literal infringement” of 11 of 11 claims of U.S. Patent No. 7,139,761 owned by Leader Technologies. In other words, Facebook is running on stolen technology.
MSNBC Staff. “After Facebook IPO debacle, finger-pointing begins.” MSNBC, May 21, 2012. Accessed May 21, 2012.
POSTED May 21, 2012 11:30am:
Stories over the weekend reveal that the underwriters of the Facebook IPO are still holding hundreds of millions of shares of the stock.
| Goldman Sachs | 63 million shares |
| Morgan Stanley | 162 million shares |
| JP Morgan | 82 million shares |
| TOTAL | 307 million shares |
Looks like the big banks have been Breyer-ed!
“Breyer-ed” is a term I created for an April 27th post:
Breyer: (bri-er) verb
1. The act of intentional confusion. To layer investment entities with the intent to mystify regulators and investigators. The bait and switch.
Breyer-ed: (bri-erd) past-participle
1. The result of being manipulated.
“The muppet investor stood dumbfounded, realizing that he had just been Breyer-ed.”
This term refers to the many different layers of investment entities of Accel Partners. Accel Partners is the private equity firm that first invested in Facebook back in 2003. They are also involved heavily with Zynga, a firm whose insiders dumped $49 million worth of publically traded shares on the market, causing the stock to collapse more than 50 percent!
Now some of our nation’s biggest banks are ‘stuck’ with shares as James Breyer et al have lined their pockets with money made from selling Facebook shares at $38.
See more on Zynga post here.
More in James Breyer here.
These articles explain more about today’s new regarding Facebook:
MEEP, MEEP
POSTED: May 19, 2012 11:23 AM
The Facebook IPO officially launched May 18th.
The Nasdaq delayed the opening from 11am to 11:30. I hear that the sudden influx of institutional SELL orders at the open delayed the process.
The IPO price was locked in at $38 per share. The stock’s opening price was $42. FB made a high of $45 early in the session, a low of $38 and closed at $38.23. You can find some interesting statistics on the day’s trade here.
Statistics include: 1) Volume of shares traded Friday was 580,587,742. This number set the record for first day IPO trading volume. See CNBC story here. 2) There are 635,882,000 shares outstanding. (See more below.)
I heard during the trading day that the price was being stabilized/supported at $38 by the underwriters. Turns out that was exactly the case: This article details exactly the number of shares that traded near $38 and exposes the blatant market manipulation. Embedded is an 8 minute video which explains why the underwriters (JP Morgan etc.) were forced to accumulate millions of shares of stock to support the $38 level. There were active speculators in the market SELLING the stock in major volume near $38.(If that link is password protected, try this one and click on the purple headline at top.)
See this Bloomberg article as well. Also interesting to note in the Bloomberg article: “Days before the sale, Facebook and Morgan Stanley (MS) decided to bump the offering price range to one with $36 as a midpoint to persuade the company’s backers to sell more of their stock, one of the people said. Facebook and the bankers knew pre-IPO investors were willing to sell more, though not at the initial midpoint range of $31.50 a share, the person said. Goldman Sachs Group Inc. (GS) and Accel Partners were among backers that decided to sell additional shares in the IPO.” How does this translate to you? To me, it reads that the insiders wanted to sell more stock, but demanded a higher price. The article suggests that these insiders were somehow ‘persuaded’ to sell at the higher price. As if Morgan Stanley felt there was so much demand for the stock, that they needed more shares to be available on the market. Yeah, right. There was so much demand that the bank had to BUY shares to keep the price above it’s IPO valuation. Meep. Meep.
Reporters then compare the FB opening day versus other similar IPOs. Google, LinkedIn, GM, UPS, all had huge volume, but ADVANCED on the day. Click here.
The fun continues as the Nasdaq halted shares of ZYNGA after it traded down 13.30% and triggered the single stock rule. See the official Nasdaq recount of the day’s trade here.
Click here for ZNGA chart.
Click here for FB chart.
On May 16th, Facebook released their 8th amendment to the original S-1 filing. A number of changes were made that:
- dramatically increase the risk to non-insider investors, and
- further demonstrate the greed in the hearts of the Facebook cabal.
There were CRITICAL changes from the S-1, No. 1 to the final, No. 8.
- Seventh Amendment:
“Facebook, Inc. is offering 180,000,000 shares of its Class A common stock and the selling stockholders are offering 157,415,352 shares of Class A common stock.”
Final: “Facebook, Inc. is offering 180,000,000 shares of its Class A common stock and the selling stockholders are offering 241,233,615 shares of Class A common stock.”
An increase of 83,818,263 shares. ALL offered by insiders. Not new shares, but shares already owned by Zuckerberg et al. Every dollar goes to their personal accounts, NOT Facebook’s balance sheet.
Facebook S-1, No. 1 Facebook 180,000,000 53.3% Insiders 157,415,352 46.7% Total 337,415,352 100.0% Facebook S-1, Amended, No. 8 Facebook 180,000,000 42.7% Insiders 241,233,615 57.3% Total 421,233,615 100.0% All versions: “We will not receive any proceeds from the sale of shares by the selling stockholders.” “We” being the company, not its owners.
- Seventh Amendment (page 156):
91 days after the date of this prospectus, 171,797,666 shares held by the selling stockholders other than Mr. Zuckerberg;
181 days after the date of this prospectus, 1,338,453,216 outstanding shares and approximately 18 million shares underlying other net-settled Pre-2011 RSUs;
211 days after the date of this prospectus, 141,776,569 shares held by the selling stockholders other than Mr. Zuckerberg; and
366 days after the date of this prospectus, 93,815,940 shares held by Mail.ru Group Limited and DST Global Limited and their respective affiliates.
Final version (page 156):
91 days after the date of this prospectus, 268,113,248 shares held by the selling stockholders other than Mr. Zuckerberg;
181 days after the date of this prospectus, 1,222,849,097 outstanding shares and approximately 18 million shares underlying other net-settled Pre-2011 RSUs;
211 days after the date of this prospectus, 123,746,921 shares held by the selling stockholders other than Mr. Zuckerberg; and
366 days after the date of this prospectus, 47,315,862 shares held by Mail.ru Group Limited and DST Global Limited and their respective affiliates.
Facebook S-1, No. 7 91 days 171,797,666 9.8% 181 days 1,338,453,216 76.7% 211 days 141,776,569 8.1% 366 days 93,815,940 5.4% Total
1,745,843,391 100.0% Facebook S-1, Amended, No. 8 91 days 268,113,248 16.1% 181 days 1,222,849,097 73.6% 211 days 123,746,921 7.4% 366 days 47,315,862 2.8% Total
1,662,025,128 100.0% Note the shift of shares to earlier lock-out dates. Not only did the insiders offer more of their personal shares to the market, they decreased the amount of time they are required to hold additional shares. If they believe in the company so much, why the rush to sell shares?
- All versions (p. 138 on original and p. 156 of final): “As a result of the lock-up agreements and market standoff provisions described below and subject to the provisions of Rules 144 and 701 under the Securities Act, these restricted securities will be available for sale in the public market as follows:”
If you recall from an earlier post (click here), these SEC rules basically allow insiders to sell shares before lockout date if they desire, without SEC disclosure!!
- Unusual Amount of Retail Allotted?: I hear an unusual amount of IPO shares were offered to the RETAIL INVESTOR. Brokers at Smith Barney, for example, were allotted more shares than normal to offer to their individual clients. I am searching for hard data on this. If you find some, let me know!
STAY TUNED!!!
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{ 36 } Comments
Thanks again, Donna, for superb reporting on the ever-deepening manipulation and corruption swirling around this circus.
I have e-mailed information, along with your link. to Congress, conservative media, etc., but no response. Why are cricket chirps the only sounds we hear? Are those at the top – no matter the political stripe or persuasion – quietly advised not to take this one on?
Mark Zuckerberg says that he never saw the Leader white papers, but Zuckerberg sent David a copy of this white paper. David contacted Fenwick who was representing Leaders Technologies, about how Zuck got this white paper, Zuckerberg got the white papers from Michael McKibben’s son Max .
Zuckerberg stole the first white paper and then the updated copy of Leader’s Technologies white paper in late 2003.
Fenwick, you knew of the idea for Facebook and you know Facebook was stolen by Mark Zuckerberg. The Winklevoss twins and Aaron Greespan know that Mark Zuckerberg stole the idea for Facebook and used the information to extort money from Zuckerberg. The winklevosses contacted WAYNE CHANG and sold the stolen idea for Facebook to Wayne Chang. Fenwick did not disclose this information about Facebook to Michael McKibben.
I don’t think people realize how drastically our property rights were eroded by this Leader v. Facebook decision. Besides punishing a real inventor who “did it by the book,” it signals to inventors that the U.S. Constitution will not be honored and that there is no point in putting your inventions forward through the patent system for protection.
The Zuck took the USPTO published Leader ’761 patent in June 2004 and copied everything… then the Federal Circuit relied on a bogus technicality to protect Facebook? Such action from our second highest court offends the senses.
We muppets must fight it until it is overturned. Hopefully principled attorneys will join us, albeit anonymously for fear of being punished by the courts. It is certainly sad that our “advocates” are so morally compromised. Sigh. We muppets will have to learn their jobs now and right this listing ship.
U.S. Constitution – Article 1 Section 8
“To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;”
http://www.house.gov/house/Constitution/Constitution.html
This is the ONLY property right described in the Constitution. Are we going to sit quietly while this right that our parents, grandparents and great grandparents fought and died for is stripped away by morally bankrupt scoundrels who have worked there way into the levers of financial power in this country?
Does everyone realize that until this Leader v. Facebook case is overturned, other current patent infringement scoundrels can use this case as precedent and justification not to have to put up any hard evidence for their bogus defenses? All they have to do is put on some well-rehearsed trial theater to fool an unsuspecting judge and jury. Here’s how Facebook fooled the Leader v. Facebook jury >>>> http://www.youtube.com/watch?feature=player_embedded&v=VkMdF5RdS08 < <<< and >>>> http://facebook-technology-origins.blogspot.com/2012/01/how-facebook-tricked-jury_26.html <<<<
We must fight this case in the streets. NOW. We cannot rest until this injustice is put right.
I am by no means a legal scholar, I am not “Harvard educated”; but I am, however, smart enough to know the US Constitution, and the rights and freedoms of the individuals it was designed to protect. It seems to me that the courts have consistently trampled on the rights of the victim, and have allowed the perpetrators (defendants, if you will) more lee-way in recent arguments. What the Circuit Court did here is no different; they set about to disprove the victim’s (Leader Tech.) claims, instead of making the perpetrator (Facebook) prove theirs. This is backward thinking given the Constitution protects the rights of the victim. If we entrust (honorable) men and women to be arbitrators of those rights, then what can the people do once that trust is betrayed? If the High Court does not hear this case (Leader v Facebook) and render proper judgment (judgment that is solely based upon facts and precedent), then this will go down as not only the largest theft in history, but it will sound the death bell for the fabric of our society.
I appeal, not only to anyone associated with the High Court, but also to anyone associated with judicial oversight in the U.S. Congress. It has been said here before, that this ship must be righted, and soon. Amen!! And, if anyone in the media wasn’t too busy slurping a Kool-Aid Popsicle from the Wall St. Ice Cream Stand, they’d realize that they were (investigative journalists) with a lot of food for the fodder!
I had no idea that the address for Facebook is: 1 Hacker Way, Menlo Park, CA. Hacker Way? Come-on! Does it get any more obvious than this? DUH!
We need to send emails, personal comment and Donna’s link to each of the principals of each and every Silicon Valley Venture Capital firms. As it is quite evident that the “Facts” that are contained in her blog are still unknown to the VC firms that are not on Facebook’s payroll.
It will be a little tedious, however, they do need to be informed! You can find them on;
http://www.svdaily.com/capital.html
Here is some possible wording:
[quote]Subject: Facebook and Federal Court eroding fundamental property rights. Message: Are you aware of a fundamental attack on property rights by Facebook and the federal courts!
Former Bloomberg reporter, Donna Kline, has investigated this issue extensively. You can read more about this here: http://www.donnaklinenow.com A movement is growing to demand the Court overturn this decision, to protect constitutional property rights.[end quote]
So stay the course! As others have said, “We muppets must take action!”
Meep! Meep!
I’m beginning to think that airplanes towing banners over Washington D.C., New York City, and Silicon Valley with the message:
“FB Judicial Corruption? See http://www.donnaklinenow.com”
might be the only way to get the word out.
Good Morning America a team of adults who should know better depicted Zuckerberg as a new age knight in hoodie, sporting a Red Bull. HACKING is a new accepted and admired way to achieve and get ahead. Looked at as “a good thing”. Isn’t this a great model for our children to see that you don’t need to be a great mind of invention ,just a thief of invention, put your name on it and reap all the gold and glory. Next they will be burning our Constitution.
I love BG’s idea!!! Bombard the venture capitalists with Donna’s blog. Let’s get them worried about what the muppets will do next until they clean up their acts. This sort of campaign works. We once bombarded our State House with phone calls, emails, letters, and requests for meetings, and requests for inquiries over the corrupt acts of one of the governor’s agencies after the governor kept delegating the investigation to the person we were complaining about. It worked. Citizen power and activism is the main thing the elites fear.
These crooks are just recycling the dotcom “new normal” spin… trying to buy more time to capitalize on their crookedness before the bubble pops. Don’t buy this “death of privacy” spin for one second. Every time privacy and property have been undermined in history, a new Dictator/oppressor emerged as an inevitable consequence. A person’s right to privacy never grows old or out-of- date. It is a fundamental human right.
People. It’s over. This dispute is dead. Right or wrong, there is nothing that is going to change it. Facebook won. The supreme court is never going to touch this. The legislature cannot touch this. The media is irrelevant. Sorry, but this is the end of the line for this particular dispute. Perhaps this opinion gets overruled in the future, but it will not matter for this particular case.
LOL Mark. You wish. Last time I checked our system of governance is based on “checks and balances” to counter corruption. In my experience, the corrupt always find such checks a real annoyance. Sorry bro. Meep, meep.
I too am outraged at the ignorance that the judicial system is showing on the Leader v Facebook case. Everyone should have their 3 minutes of fame and it is due time that Leader had theirs. I will continue to fax, email, call ,write, tx and tweet until someone takes notice. Its not too late. Sincerely, The holn8or
No one should be surprised that Accel Partners and Goldman Sachs are bailing on this stock before and during the opening. It’s always been about the insiders getting all their cash out of Facebook. Forget about the rules and propriety that the rest of us must follow.
Donna, I want to say thank you for all the great work you do in exposing FB’s prostitution of the law. As an investor I’m so frustrated by all of this and feel bad for what is happening to Mike and everyone connected with Leader.
Perhaps we need to connect with one of the big boys who has as much “power” and hates FB too (surely the Zuksters have made enemies) and find a way into the game if that’s how it has to be played, not that I approve of the tactic but if those are the rules of the game then “play ball”!
Keep pounding away at getting the truth out however you can. Grassroots activism is our last line of defense when our formal mechanisms for accountability have been compromised. Let’s believe that truth will win out, in the end, over lies, greed, coercion and corruption. The American Revolution is a good example of right winning out over might.
Hey everybody..Been taking bg761′s advice and have been contacting Silicon Valley Businesses(Lots of them to invade) Here again is the link he provided…http://www.svdaily.com/capital.html. I have been going to any email that has a hyperlink and attaching( http://www.donnaklinenow.com/investigation/Facebook-IPO-is-the-Bubble-Over-Before-It-Started.Facebook and Federal Court eroding fundamental property rights.) I have not been picky about who I have emailed. A lot! examples..Investing, customer service , areas of more info on company..ect ect. Really there is a lot of branches you can give a FRIENDLY piece of advice and info to for their knowledge and understanding.
I would encourage everyone who follows Donna’s blog, or who has a concern about this case, to continue to apply pressure via emails, tweets, and phone calls. There are a lot of personal twitter account links available with these techy people.TWEET AWAY! Any avenue you can find..even a fork in the road..take it! I t will all come full circle.
everyone: please go to http://www.judgenap.com and click on contact. Send him an email. He is Judge Andrew Napolitano, the senior judicial analyst for fox news and fox business news. I couldn’t figure out how to attach a link. Don’t think google chrome does that. Let’s get a bunch of emails to him and hope to get his attention by getting bombarded.
http://www.foxnews.com/politics/2012/05/22/federaljudges-under-fire-for-maui-conference-have-history-tropical-getaways. Now, why at this point does this article not surprise us…meep meep!
http://www.marketwatch.com/story/facebooks-zuckerberg-thiel-sell-shares-2012-05-22
time to sell boyz
http://www.businessinsider.com/exclusive-heres-the-inside-story-of-what-happened-on-the-facebook-ipo-2012-5
the blame game begins.
William Galvin, Secretary of the Commonwealth of Massachusetts, is on the move as you all have read. I informed him via e mail: cis@sec.state.ma.us. All of us should send him a message Subject: “Facebook IPO Corruption . . . Morgan Stanley, Lawrence Summers, Goldman Sachs, SEC, James Breyer, Juri Milner, Accel Partners, Digital Sky, Peter Thiel, Sheryl Sandberg, Fenwick & West and http://www.donnaklinenow.com“
Donna once again has been proven correct. The SEC was warned about the corruption with the Facebook insiders. Now the news media is surprised!
Thanks theheckler for the links.
We need keep contacting our Senators and Congressmen and news media with Donna’s blog.
Also Donna was right about the corruption at MF Global . . .now we can add Morgan Stanley and JP Morgan!
http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2012/05/23/bloomberg_articlesM4DZ8O0D9L3501-M4HEL.DTL
What’s this about a senate investigation into Facebook? It was on kutlow last night.
Dear fellow muppets,
I just had a very enlightening conversation with a prominent professor of intellectual property law. The Professor follows Donna’s investigation and is equally disturbed by the Federal Circuit’s Facebook-love-fest. The Professor indicated that federal judges are human too and can be coerced or corrupted. The Professor said that he/she has studied the evidence and does not believe Facebook has a legal basis for continuing to prevail on the on sale bar claim. The Professor encouraged us to SHINE THE BRIGHT LIGHT OF PUBLIC SCRUTINY on each and every subsequent action and decision of this court until they do the right thing. The Professor expects Leader to file its petition shortly and said it is time for the public to INSIST ON / DEMAND fairness and equity. The Professor indicated that “shame” is a useful public tool when judges have not fulfilled their solemn duty to preside over justice.
Meep, meep.
Glenn, who is this business reporter?..Do you have anymore info on it..?First name..? Is this a tv show? ..radio?
We are all trying to get in touch with whoever is remotely involved or could be somewhat connected and/or interested in the Leader v Facebook Corruption case. Post all info and we will pursue.
I did. We will see what happens.
Kudlow is a seasoned economics reporter for CNBC. I will Email him.
Larry Kudlow. The Kudlow Report. kudlow@cnbc.com
Oh, and I can’t help but wonder why we haven’t heard from Jill or Derek recently…
New post coming tomorrow. Meep. Meep.
It was the Larry kudlow show last night. Larry was not there. There were two others hosting the show .
Facebook IPO Faces Senate Panel Review. 5hrs ago by Marcy Gordon, The Associated Press. Seen in the Arizona Daily Star in Tucson AZ. Thanks Glenn.
Marcy Gordon. “Facebook IPO faces Senate panel review.” Arizona Daily Star, May 23, 2012.
This is going to be quite entertaining……FB IPO was a disaster and blame now going to NASDAQ ……. diverting attention away from the greedy criminals running the FB machine. Besides the IPO joke, FB problems now center around failure of FB platform to adapt to mobile use. Rumor has it, Zuck is searching emails all over Silicon Valley trying to “hack” a solution. Mark my words, when billions are involved, thieves will turn on each other very quickly…lawsuits will pop up everywhere. ENRON will prove to be a small potato when the dust settles on the ZUCKSTERS., and a few of those ENRON boys are serving very long jail sentences. Perhaps Jeffrey Skilling can teach them to dance backwards !!
I don’t understand how all this has anything to do with righting the wrong as far Leader Tech. is concerned. I’m sure I am being ignorant, but it seems to me it’s just going to push it farther back on the shelf. And how amazing is it that the media is all over this.
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