STOCK MARKET WATCH -- Friday, 1 June 2012

[Fuddnik]

7. Morgan Stanley CEO: Some Facebook investors were 'naive'

No shit Sherlock! And you knew that going in, and fleeced the shit out of them!
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By Martin Wolk

Updated at 5:40 p.m. ET: Investors who expected a big opening day "pop" for Facebook (FB) stock were "naive" and bought it for the wrong reasons, Morgan Stanley CEO James Gorman said Thursday.

Gorman, in an interview with CNBC's Maria Bartiromo, defended the investment bank's handling of the landmark initial public offering and urged investors to have patience, saying the story is still in its early days.

Gorman acknowledged there was "enormous confusion" around the pricing of the stock on its opening day, which he largely laid at the door of the Nasdaq stock market. Nasdaq has acknowledged serious problems in handling the enormous volume of the IPO May 18, which drew unprecedented interest from retail investors.

Referring to the initial hours of trading, when buyers and sellers were not getting price confirmations, he said: "That confusion frankly in a deal of almost unprecedented size, against a macro backdrop of everything going on in Greece, created a potent elixir, if you will, that really set this thing aflame."

Gorman defended the decision of underwriters to price shares at $38, the top end of the estimated range, and to increase the size of the offering, citing the huge demand. Facebook shares since have fallen more than 20 percent to under $30.

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http://marketday.msnbc.msn.com/_news/2012/05/31/11994350-morgan-stanley-ceo-some-facebook-investors-were-naive?lite