The Facebook stock offering has been an unqualified debacle. Many investors got lured into the hype, while others smartly passed. The stock price is down nearly 50% from the initial offering price as of yesterday’s close at $19.44. By the way, the S&P 500 has gained more than 9% during the same time period.
What’s a bit more surprising is how some mutual funds dove in without abandon. For example, Morgan Stanley funds took big bets on Facebook. Eight of their funds have >5% of their assets invested in Facebook.
In June, a commentary on Morgan Stanley’s fund website reported that Facebook and other tech stocks were “the leading detractor in the portfolio this quarter,” discounting the decline in Facebook shares “to post-IPO volatility.”