Many Facebook insiders are heading for the exits, planning to cash out shares in Friday’s initial public offering. A filing shows early Facebook investors could sell as much as half their stock. The offering is the most anticipated in years, and is expected to be priced after the market closes today. Shares are likely to be set about $35 each. But the cost to the public might be far more. “The price may immediately shoot up 40-50-60 and then you’re paying double what it was just a few minutes, an hour earlier,” Hofstra University finance professor Andrew Spieler says. Only insiders get the pre-market price. “Those that are buying it second hand, which could be just minutes after the market opened, are already buying it at a substantial premium.” Spieler says many hot IPOs start high and later fall in value: “If you look out two to three years, the majority of IPOs have actually gone down.”
The worst of the foreclosure crisis really does appear to be over. “We’re seeing a continued decline in foreclosure activity nationwide,” Daren Blomquist of listing firm RealtyTrac says. “There were less than 189,000 properties with foreclosure filings” last month, he says, and that was the lowest level in nearly five years. “It’s not that foreclosures have completely gone away by any means, but at least they’re heading in the right direction and finally have kind of gotten through this very big batch of bad loans that triggered the foreclosure crisis in the first place,” Blomquist says.
A blunt warning about the future of the euro from Britain’s Prime Minister David Cameron, who’s on the outside looking in: In a speech today, he urged the 17 nation eurozone “to make up or it is looking at a potential breakup.”
Spain managed to auction more than $3 billion dollars in debt this morning. Demand was strong but at sharply higher interest rates. That means Spain is paying a lot more to fund its debt.
Take that, JP Morgan Chase! The Wall Street Journal reports in the wake of the huge trading loss, the White House is pushing for a tougher interpretation of banking regulations. The new rules are supposed to prevent big banks from taking bets with their own money. “White House officials have intensified their talks with the Treasury Department in the days since JP Morgan’s losses came to light,” sources tell the Journal.