Thursday, May 19, 2011

Now that is what I call an efficient market!

I could only muster a general commentary today because I'm too busy counting my profits from flipping Linked-In shares.

Just kidding. After all, CCI is not exactly a "best client" of Wall Street firms that can "efficiently" profit from the arbitrary setting of a price at $45 and then watching it sell for $80 ...or was that $122...or was that $94. (today's trading range)

A few data points from today (unaudited)

  • Linked in's market value of $8b would put it near the middle of the S&P 500 market cap. I guess a web-site, eyeballs and a $161m in revenue is worth a lot more than you might think.

  • My understanding is 7.8m shares were sold in the IPO. Today's trading volume 30.1m shares. If that is right, on average a share changed hands 4 times today. Not exactly buy and hold!

  • 5th largest IPO in history (not sure how that is measured)

  • FYI, I tried to short this when it was over $100, but could not. I'm not exactly sure why. I think there are restriction on shorting IPOs until the initial trades clear/stabilize or perhaps there were technically no shares available to borrow to be able to short. All I know is I am really, really glad those naked shorting rules and financial regulation legislation are protecting me from market manipulation!

One last deep thought...... if Linked-In is so valuable by simply providing a network of professionals, maybe Common Sense says that a network of investors sharing their main street investment knowledge can be more valuable than the advice of financial services firms who orchestrate this type of ridiculous market activity.

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