From Yahoo: Didn’t We Learn from Facebook? AutoTrader.com IPO Filing Shows Market Is as Sleazy as Ever
Just a month ago, Facebook (FB) was the ”poster child” for IPO reform. Its public debacle triggered countless lawsuits, Congressional probes and regulatory inquiries, and cast a cloud of doubt over Morgan Stanley (MS) – who brokered the deal, and the Nasdaq exchange (NDAQ) that botched an orderly open. It seems the only good thing being said about the Facebook IPO was that it just might mark a turning point for a deeply flawed system.
I hate to break it you, but it’s not happening.New federal filings show that Autotrader.com is looking to become the first internet company to retest the waters of the IPO market since Facebook’s May 18th debut. There’s only one problem; six weeks ago AutoTrader insiders borrowed $400 million in order to turn around and pay themselves a one-time dividend in the same amount. I call it, cashing in before you cash out, while my co-host Jeff Macke is more blunt.
“There’s nothing illegal about this, it’s just kind of scummy,” he says in the attached video. “They’ve made it a lesser company and immediately after doing so, they’re pitching on to the public.”