“The order book is extraordinarily strong. I don’t understand it,” one very well-known manager said, speaking on the condition that he not be named.
Another well-known manager said he believed Facebook has a lot of potential but that the price had shot up too far:
“Their growth was flat last quarter. How do you justify the multiple they’re getting with growth like that?” he said. (I’m not sure he knew I was a reporter when he made this comment, so I’m not going to name him. He was one of the most anticipated speakers at the conference.)
No one at Ira Sohn expressed enthusiasm for Facebook. Earlier this week, I reported that the big Wall Street guys at the Robin Hood Foundation charity gala were also underwhelmed about the prospect of buying shares in the social network.
Of course, it’s not just retail investors who are eager to buy Facebook. Most of the shares available in the IPO will go to large institutional investors. They are the ones who keep telling the investment bankers that they’re willing to pay more and more for the shares. And Facebook’s insiders, including Mark Zuckerberg, are not increasing the size of the stakes they are selling.
Yet when Goldman Sachs and the venture capitalists appear to be eager to significantly reduce their stakes in Facebook, you have to wonder: what do they know that the rest of us don’t?
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