Networking

I have a networking event to go to tonight...I am strongly considering introducing myself to everyone with "Hey, I just met you. And this is crazy, but here's my number. Call me, maybe."

Is this my best idea ever? Or just like one of the top three?

The Facebook

Just for the record, I would not recommend an "All Peanut Butter Cup" diet. I am not saying that it was a terrible idea, but it also wasn't really a great one (and I did have a sandwich in addition to the hundred-odd peanut butter cups that I ate yesterday)...

Jumping back in time a bit, I promised last week to give you my (partially informed) opinion of the Facebook IPO brouhaha. I will warn you up front that it is kinda long, a little dry, and may not be all that satisfying...but here goes anyway. I will also acknowledge that I have a financial interest in shares in Facebook now, although I won't tell you exactly how, how much, when they were bought, or what the cost was. I don't think it actually matters here...

First, a little primer on what happens when a company goes public. Let's use Company XYZ as an example...XYZ is a private company that has 100 million shares, all owned by the founders, employees and early investors. XYZ decides to raise some money by selling 10 million new shares to the public. However, in addition to selling these brand new shares, the original shareholders want to sell some of their shares to the public as well.

To some, this seems a little bit shady...the cash raised in the IPO goes to the founders and investors and employees, and not to the company for the purpose of funding growth. However, this is pretty common and has some legitimate, non-nefarious reasons: those people may incur a huge tax bill when the company goes public, and need to cash to pay the Gub'ment. They may also have some basic asset allocation issues and have a desire to transfer some of their wealth to other assets.

So, that leaves us with an initial offering of, say 20 million shares...10 million new shares (the proceeds of which go to the company) and 10 million existing shares (the proceeds of which go to the original shareholders.) The company hires and investment bank (in FB's case, Morgan Stanley) to run the IPO and sell all of those shares.

The Bank puts together a series of investor presentations, takes the company to visit potential investors and recruits other banks to do the same to their big customers. The goal is to increase interest in the IPO and get as high a price as possible for the shares that it is selling (or at least it should be, more on that later). Shortly before the actual IPO date, the lead bank issues a potential range of IPO prices, and investors get the chance to subscribe to the IPO, with the final price to be set later.

Usually, these shares go to big institutional investors that are the Bank's "best customers". And here is where the process starts to get a little fishy in my book. Typically, the actual IPO price (which is set based on final demand for the shares) ends up being somewhere around 20% lower than the price at which the stock starts trading the next day.

Back to XYZ, let's say that the final IPO price is $10/share. XYZ then gets $100 million for its shares, the insiders get $100 million for their shares, and the company is valued at $1.1 billion (110 million shares at $10/shr.) The next day, the stock starts trading and anyone can buy shares on the open market. In a normal IPO, the stock would start trading at about $12 or so, valuing the company at $1.22 billion. Anyone who bought shares in the IPO now has 20% more money than they did the day before.

Here is where I start to call bullshit. The Bankers will tell you that the 20% bump is the reward that the buyers get for taking on the risk of the new issue. I say that reward is totally disproportionate to the actual risk, and that the first day bump is really a way that Banks reward their best clients using money that should belong to the company. In XYZ's case, $20 million ($2/shr on 10 million shares) has been transferred from each of the company and the original shareholders to the best customers of the Investment Bank.

So, first thought on Facebook...much of the "failure" of the Facebook IPO was that it didn't open higher than its offering price, and has in fact fallen below that price. Well, TOUGH SHIT!!! These are not riskless transactions, and all of that crowing about how the first day premium is in exchange for the risk of the issue means that sometimes you actually take a loss on these offerings. There are no promises that initial buyers make money on these deals...economic sense says that, if the markets are fair, they would often result in immediate losses.

There has been a lot of ink about "the little guy" getting screwed here, because small investors made up a larger than normal portion of the initial issue. Ignoring the insider information allegations (I will get to them later), that is just not an argument that holds economic water. They were all issued a prospectus, all got to review the published financials of the company and bought what everyone knows to be extremely risky shares. They then lost 20% or so of their money...well, again, tough cookies. These are supposed to be high risk transactions, and there is a reason that they are not considered to be appropriate for all investors. This was the most highly publicized, overhyped IPO that I ever remember...is it at all surprising that demand outstripped reality?

For another perspective, put yourself in the shoes of Facebook, Inc and its original shareholders...Morgan Stanley just sold your shares for $38 each, and the market is now telling you they were really only worth $32. So, the Bank did a great job for you! Morgan's other customers, who are used to being bought off with company money, may be pissed, but the issuing company should be ecstatic. As much as this is a disappointment for the original buyers, it is a huge victory for the seller...who probably could have expected under normal circumstances to be the sucker in this deal.

Which gets us to another interesting point...there was a higher-than-normal percentage of insider shares in this deal. And some of those insiders are really, really influential people who may be deciding on a Bank to handle other IPO's in the near future. Did Morgan reverse course and sell out its Institutional clients in exchange for buying the loyalty of new Banking clients? Hmm...interesting theory that I just thought of there...

One party that unquestionably failed...NASDAQ. For whatever reason, their systems were totally incapable of handling the first day open, and it was delayed longer than it should have been, and the handling of orders was atrocious. Investors went for days not knowing whether or not orders were executed, or at what price. If you compare that to NYSE's opening of the only two larger IPO's (Visa and GM), NASDAQ looks like a completely amateur operation. I find it hard to believe that the next mega-IPO ($10 billion or more) will spend more than a cursory minute considering its listing exchange.

One final note...there are some allegations that an analyst at Morgan knew about a forthcoming bad earnings report and passed the information out only to his best clients. This, of course, is the absolute dumbest kind of insider information dealing...and if it is true, then the guy belongs in jail both for violating securities law #1, and also for being so incredibly stupid. Whether the company should have released the information is actually a pretty sticky question that I can't really cover because it is a LONG answer and above my legal pay grade;-) (there is a "quiet period" issue that I am just not terribly familiar with the ins and outs of.)  I am not sure where this stands (and it would explain the large number of small investors as opposed to institutions...although the sheer popularity of Facebook could explain some of that as well), but that is what the various state AG's are investigating. If it is true, then it is a really easy conviction...

So, that is my long-winded take...the whole thing makes me say "Eh" and shrug my shoulders. The fact that the price fell is not bad for the company (in fact it implies they had a great IPO), and it is not at all a scandal. IPO buyers are not entitled to make a riskless day one profit!!! If there was insider information passed to key investors, then that indeed is a criminal activity, but that seems like it would have eroded the demand somewhat as well.

If you made it this far, then you probably need a more exciting day job;-)

Peanut Butter and Chocolate

Really, really spectacular weeked! Slight change of plans on Munchkin's front, so she didn't leave until last night, which meant she was with us after all...and probably a good thing, I'd have missed her terribly:-). But she is safe and sound in Paris now, so I have to do without for a week and a half or so.

We got down on Friday night in no time at all...not a lick of traffic, and we got to the ferry about five minutes before they closed the gate and pulled away (we tend to run late, what are you gonna do?). Girls slept the whole way in the car, and then we put them in their stroller and they slept the whole ferry ride. They woke up for a bit when we got there, but went back down pretty easily and slept well (maybe because I slept with them:-))

The sun didn't come out until late on Saturday, but once it did, the whole weekend was great. The early forecasts called for Sunday and Monday to be overcast and kinda crappy, but they turned out to be even better days...sunny and warm! That meant lots of beach time for this girl and her two little girls...once they got used to sand on their feet, they were fantastic little beach bums.

So, in the end, there was a lot of time on the beach, a lot of hanging with good friends and faux family. Much, much eating, probably a little too much drinking (and possibly one drunk email to a fellow blogger on Saturday chastising her for a lack of major changes to her love life...hee hee, sorry about that Aly:-))

The girls were in heaven...there were a million people to play with them and all kinds of stuff to get into trouble with. Still no interest in going into the ocean, which is fine because it is still really cold...maybe in a couple of months they will feel adventurous enough...we'll see.

On the drive back, I randomly spent a lot of time thinking about my father. I assume it was because it was Memorial Day and there were a million "Thank You Troops" reminders around, which reminded me of learning about my father's (brief) service. True to form, the one noble thing he almost ever did didn't stick...which I guess is pretty well in character. Oh well, at least it gave me a reference to appreciate the people and families that deserve to be appreciated on Memorial Day.

Anyway, not sure what that means about anything.

And now, back to work...boo!!! I think I like the idea of sitting on the beach much more...

However, I have made a really important decision...today, I am eating nothing but Reese's Peanut Butter cups all day. Deal?

Summer!

Today is an almost impossibly spectacular day...bright, warm, clear, dry...just absolutely heaven. And, of course, I am spending the whole day working. Sometimes I seriously question whether or not Caribbean folks have this whole work thing figured out...sure, they are largely poor, but that also spend way more time enjoying weather like this than the rest of us.

Anywho...

What's new? I have been a bad blogger, and not a great blog reader this week. It's been busy at work, busy at home and seemingly busy everywhere else, too (like, Munchkin somehow lost her passport...no idea how or where, but she needed a new one, and fast.) The girls have been all full of energy and running at full speed from the time we get them until they time they go to sleep (which is never at the time I would like them to!!!).

The good news is that there is a long weekend coming! Munchkin finishes school tomorrow and ships out immediately afterwards through next weekend...it is a little frightening how routine her trans-Atlantic jaunts have become. We will definitely miss her at the beach, but I am secretly in love with the idea of my little sister the jet-setter.

I imagine we will head to the beach tomorrow night. I would love to be able to wait until about 8:30 so that the girls will go right to sleep in the car, but we have to make sure to get to the last ferry in time, which means leaving earlier. That will probably screw with their sleep and make them absolute bears for the end of the trip, but I don't feel like waiting until Saturday morning to go...so we will just have to deal. It will all be worth it when I can wake up on Saturday morning and see the ocean out the back door:-) Also, Saturday is the nicest day in the forecast, and I would rather not spend it in the car and on a boat!

It should be a fun weekend at the beach, too...pretty big crowd including a couple of friends that we haven't seen in a while. There should be a lot of eating, a little drinking and much merriment. The girls will hopefully enjoy the sand enough to hang out there most of the time. And hopefully play enough to tire themselves out sufficiently to sleep soundly:-)

Not much else going on...I thought about writing some about the Facebook IPO flap, but I would rather wait to hear more: the Morgan Stanley people are accused of doing stuff so incredibly stupid that it is hard to imagine they actually did. Either way, I will maybe tell you why I think much of the outrage should be directed at how IPOs are usually done, instead of how this one went "wrong". But that may be kinda dry;-)

Randoms

So...suddenly it is mid-May? Can someone explain to me when that happened, and how it happened without my noticing? Munchkin finishes school next week...NEXT WEEK!!! She is headed to Paris for a little over a week, and then settling in full-time at the beach. In what we now regularly refer to as "her" beach house, since she is the person who spends the most time there...

Memorial Day will likely be our first trip to the beach, which I am looking forward to greatly. As I have mentioned about 1,000 times previously, that is my most favorite place in the whole world, and I love ever single minute I get to spend there. I really start to look forward to going there just after the New Year, and run kind of a mental countdown pretty shortly thereafter. T minus 9 days:-)

I think I spoke a little bit too soon on the baby girls potty training...no further developments on that front. It has been a pretty hectic couple of weeks, and the girls have been out of their routine a lot, which probably doesn't help...hopefully things will settle down and we can get back to that. They are, however, doing a little better with the sleeping again, which is nice.

Mother's Day was wonderfully low key:-) We went to The Boy's parents' house to see his Mom and had dinner with them and his sister and her family. Nothing special, but it was really, really nice. I got adorable homemade cards from the girls (well, really from their teachers at school, since I don't think the girls did their own spelling and card construction:-)). Munchkin wrote me a card that made me cry like she does every year...little secret, I have all of them saved from the last seven years, and I read them periodically. And they ALWAYS make me cry:-)

I am sorry to have no take on this spring's trashy TV. I haven't watched any Dancing With the Stars or American Idol or The Voice or anything else that I usually write about. I am a week behind on Game of Thrones, which I am hopelessly hooked on...and I don't even know if there are seasons of Top Chef or Runway on any time soon. I seriously have to get some more time for terrible television...

Marriage

So, big brouhaha today because the President came out and said that he "supports" same-sex marriage, which is at least better than the Vice President saying he "is comfortable" with it.

A part of me understands why it is a big news story (and comes on the heels of the state of North Carolina passing a ballot initiative re-stating the current illegality of same-sex marriage there), but most of me just wants to shrug my shoulders and say "Huh"? Kudos to him for going out on a bit of a limb, although he gets points off for trying to pretend that he didn't always think this and has just been too chicken-shit to say it.

Really, what he does and doesn't support might be newsworthy, but it doesn't actually matter legislatively. What he is willing to do matters greatly, and he is yet to announce any plans to try and do anything. It is really unlikely that he will, either, which is disappointing.

He can't (and he shouldn't) do much about States making their own rules about who can and can't get married. I don't really wanna live in a State that bans gay marriage, but for a variety of reasons, it is important that States have the right to make that restriction. But he absolutely can move that the Federal Government recognize any valid marriage that is executed legally. Whether or not he "supports" gay marriage, it offends me that he is unwilling to support the right of certain States (Massachusetts being the first, but also Iowa, Maryland, California, Connecticut and some others) to make their own contractual law.

Let's take my Sister-in-law as an example. She and her wife are married. They are not in a civil union, they did not have a commitment ceremony...they got married in exactly the same legal way that The Boy and I are. Under a legally valid, recognized, enforceable contract.

Yet, when they file their Income Taxes, they are not allowed to file as Married. Should one of them ever receive Social Security, the other can not be treated as a spouse under survivorship rules. The Federal Government has denied the Constitutionally designated right of the State of Massachusetts to enforce marriage contracts. Yes, bad news to the talking heads on the right...all of those "States rights" arguments that you like to use (and which are often valid)? Well they should apply here, too.

It is also totally up in the air as to whether other States have to recognize marriages that are legally created in Massachusetts or in other States. If there are other examples of States being able to choose which of other States contracts are valid, I am unaware of them...one of our basic rules of law is that valid and legal contracts signed in one State are enforceable in all of the others. Just, apparently, not these ones.

You want a parallel? Well, I am glad you asked, because I have one!!! In 19 States, it is legal to marry your first cousin. In 6, it is sometimes legal (if at least one of you can't reproduce...say what?!?). And in 25, it is illegal. Why is it illegal? Because we think it is icky, that's why!!!

But two cousins who get married in, say, Colorado, will be treated as married if they move to Iowa, despite cousin-marriage being illegal there. And the Federal Government has no problem allowing those people to be treated as married, regardless of where they live. Because that is how legal reciprocity works in this country. Or at least, that is how it is supposed to work.

So, in conclusion, good for the President for at least saying something. But let's not pretend that what he did actually matters...there are very real, tangible laws that he could propose and champion that will matter, and he has yet to choose to do that.

Where have I been?

The title of this post implies that I have been somewhere...which is kind of a lie. I have been super busy, but not with anything remotely exciting enough to detail at length.

Work has been a zoo, which is obviously both good and bad. Good because it is interesting, bad because I like doing nothing more than doing something:-). Our house hunting seems to have ground to a halt, too...we never really did make much progress, and I think we have decided to stay put for another couple of years until we are looking in a different price range. Hopefully our needs and tastes won't grow faster than our bank account!

Munchkin has two weeks of school left, and then she is moving to the beach again (after a trip to Paris, of course.) She wanted to spend a week in Paris instead of Nice, so she is going at the very beginning of the summer before his family moves, and I can barely believe that I just had occasion to write that sentence:-) And then she is...gasp...a SENIOR IN HIGH SCHOOL! At some point this summer we are going to go on a little bit of a college road trip. I know she has pretty much already decided where she is going to school, but I want her to go and visit a couple more schools just to be sure. I will feel better about the whole thing if she has at least visited and taken the tour. Plus, it will be a fun trip:-)

The girls are on the verge of a major developmental breakthrough...LK used the potty, and I think they have both figured out how the whole thing works! MA used it once a couple of weeks ago, but I think that was sort of an accident...she happened to be sitting on it and peed, I don't think that she really connected the two ideas. Call it the first step in the long road to potty training...

Now, if I can just get them to stay in their beds all night long...

Evolution

I am going to be 30 in just about three months, which is a pretty obvious time for some assessment and self-analysis. I am not even going to touch the question of "Am I where I thought I would be when I was 20?" because there is absolutely no way to reconcile my current life with my expectations from July of 2002.

But I am going to talk about some changes that I have noticed, and as the big day approaches this summer, I will probably do the same on at least a few more occasions. Today, I wanna talk about gray...as in "shades of" (and not the middle-aged woman porn that means these days;-)).

At 20, things seem black and white. Honestly, by 23 or 24, they seem even clearer...the world seems to make sense, or at least your ideas seem to make sense. At that age, we have pretty strongly formulated opinions about work, life, politics, friends, etc. A less kind assessment would be that we are know-it-alls;-)

I think I am starting to appreciate better what I don't know...and I am becoming more open to the idea that people can hold opposite opinions from me and not be totally crazy. At 30, I think I am realizing that things are a lot more gray than I ever thought. I find myself getting less and less off-the-bat outraged over things because I am better at looking for other sides to issues.

Take this election season, for example. It seems like every week has been marked by a "War on (fill in the blank)". I especially like how there has been a war on the rich, the middle class AND the poor...that is the kind of equality war-mongering that I can really get behind. There have also been wars on women and students and conservative women and the environment and business. Oh, and definitely dogs. (But surprisingly little talk about an actual war...you know, in Afghanistan? Remember that one?)

And really, the overly-dramatized outrage doesn't serve any purpose other than to desensitize us all to really serious issues. With some limited exceptions (I am looking at you, proponents of mandatory vaginal ultrasounds), my basic reaction is that people just need to chill the fuck out a little bit. Every time someone proposes a new law, it is not THE WORST THING EVER!!! We should be able to disagree without flying off the handle.

Part of it is having kids, which should come as a surprise to no one. But that has changed my ideas not just about children and raising them, and not just about obvious things like parental interaction with children. I guess you just view the world a little bit differently when you feel like you are responsible for it to your kids. And I think you realize that a lot of opinions you previously held are more selfish than you ever thought they were. That probably seems a little bit preachy...

Part of it comes from seeing more academically and professionally, too. I think I view activism, for example, a whole lot differently because I have been around so many people who "get stuff done". No one ever built a monument by sitting around and bitching about it, I guess. And it's helped me to identify those things that really are important, and those things that may be irritating but which really don't matter.

Not everything is the end of the world. Not everything you miss out on is really the best opportunity you will ever get. Not everyone who disagrees with you is an idiot. Nor are they evil. Not everything is cut and dried, black and white.

They world is much more gray than that.