Thursday, May 17, 2012

A Facebook Underwriter's Confession

"Before I'd put retirees in 'em,
I've got to confess my unease in 'em;
The shares would be splendid
If they were still friended
In one or two months, just to season 'em."

Facebook has finally priced its IPO at $38 a share, valuing the social networking company at $104 billion. The global frenzy for $FB was so great in the weeks leading up to the initial pricing that US demand alone would have bought 30 times the 421 million shares on offer. Under such circumstances, a double-digit "pop" in the price is to be expected on the first day of trading, and those who did not count themselves among the fortunate few to receive allocations of IPO shares had better wait for the hysteria to die down before "liking" Facebook stock with their retirement savings.

1 comment:

  1. Yes, this is a difficult moment for underwriters. There is a great deal of change going on, which is always difficult. The industry must address issues such as an aging workforce, key staff retirements, staffing shortages, and increased pressure to meet a new and growing set of metrics/responsibilities, and while there is a tidal wave of new technologies available, finding the right technology is a critical solution. We expect considerable changes and much more simplification of the underwriting process as technology replaces many of the present touchpoints. Given this tendency, every automated underwriting solution must start with a safe, accurate, and up-to-date state of the asset. Visit and get more fun games there.


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