Banking & Finance

Facebook Funds/Owners Now Have To Fend For Themselves (FB, GSVC, SVVC, SOCL, ZNGA, MSFT, GS, TTII)

Finally we are going to get stop hearing about the IPO of Facebook, Inc. (NASDAQ: FB).  This is the largest IPO of its kind ever and appears to be the third largest IPO in U.S. history.  For those investors who have wanted to chase up the shares of “those companies which own Facebook” you better take a look at how these have already started selling off.  In the late 1990s and even in the early 2000’s we would see a “sell the news” reaction right at about the same time as the IPO or whatever the big event was.  Now it is happening right before the big news as you will see in most of these.  Remember, these are now under ‘known events’ so there would seem to be little reason to chase these around on the day of the event when the selling has already been seen.

GSV Capital Corporation (NASDAQ: GSVC) owns Facebook shares and has for some time at what may be as much as a 50% profit.  The closed-end BDC has also raised capital on more than one occasion each time the stock popped up. Shares were at $19 earlier this week and the stock closed at $16.10 on Thursday.

Firsthand Technology Value Fund (NASDAQ: SVVC) was at $30.00 earlier in the week and it is already under $27.00 against a 52-week range of $14.12 to $46.50.  This one recently raised  $127.7 million via a secondary offering and it plans to invest the cash in portfolio companies.

The one ETF we would be watching is Global X Social Media Index ETF (NASDAQ: SOCL), but only AFTER the Facebook IPO for a few days.  This ETF will ultimately include Facebook with likely a max of 10% weighting at the onset of the inclusion date.  Keep in mind that it does not own Facebook shares before the IPO.

Zynga, Inc. (NASDAQ: ZNGA) has still been trading as a busted IPO but it and Facebook have very deep revenue ties due to the social gaming.  Here is where you can spend real life money on virtual farm animals!

As a reminder, Goldman Sachs Group Inc. (NYSE: GS) owns (with affiliates) over 65 million shares and it is selling more than 28 million shares.  Microsoft Corporation (NASDAQ: MSFT) also owns 32.7 million shares, but those are of the Class B shares.

Tree Top Industries, Inc. (OTCBB:TTII.OB) rallied on news that it owned no less than $100,000 worth of Facebook shares.  The company calls itself a mini conglomerate based on Teledyne’s business model.  Oh boy!

Facebook is the new F-word on Wall Street.  Starting next week and the week after that, the financial media is going to have to find something new and hot to talk about all day long.

JON C. OGG

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