Facebook: You may have passed, but mutual funds loaded up!
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.”