As Facebook shares continue to plummet, dropping another 4% last night to SU$19.16 (around half their float price of US$38), it turns out not everyone is disappointed by the dour share price performance of Mark Zuckerberg’s social network. As insiders like Peter Thiel sell their stock (Thiel reportedly reaped US$400 million last week from offloading his remaining Facebook shares), bankers who advised the company have actually benefited from the stock's drop.
Advisors on the Facebook float collected US$176 million for their sage advice on the IPO. However, as The Wall Street Journal's Lynne Cowan explained, lead underwriter Morgan Stanley actually made another US$100 million on top of their US$50 million in fees through a "short" position on Facebook shares. Cowan noted: