Right now, reports Lynn Cowan of the Wall Street Journal, while Facebook investors digest the fact that the stock has now dropped to $19 from an IPO price of $38, Facebook's bankers are divvying up another $100 million they made on the Facebook stock, this time in a much less visible fashion.
How did the bankers make this second bonanza?
By shorting Facebook's stock.
By, in other words, selling Facebook stock they didn't own and then cashing in when the price dropped.
Wall Street didn't call this "shorting" the stock, of course. Because "shorting" is widely understood to be a bet that a stock will drop. And obviously bankers don't want to be seen as "betting against the clients" they just sold IPO stock to.
Instead, the big short position that Facebook's lead banker, Morgan Stanley, took in Facebook's stock at the IPO price is described as engaging in "price stabilization"
Read more: http://www.businessinsider.com/facebooks...z24BGrVkbl
Not illegal but sure filthy