Heads I Win, Tails You Lose ... Caveat Emptor.

In the recent Facebook IPO debacle, the role that Morgan Stanley and other underwriters have played is a curious one. (See Morgan Stanley made money on Facebook share drop).

As a routine procedure, it seems that the underwriters typically get to buy an additional number of shares from the company offering stock to the public.

"Investment bankers typically sell 15% more shares in an IPO than they actually have. ... Included in every IPO deal is an agreement that gives underwriters the ability to buy more stock from the company at a slight discount to the IPO price. So if the price rises after the offering, the underwriters can buy the shares from the company that they have promised to other investors, but don't actually have, and book a small profit. ... In effect, the underwriters were short the stock. ..."

So far, so good. Underwriters, in effect, have a call option on the stock.

Choice of Commencement Speakers.

WISHING ALL GRADUATES EVERYWHERE

The choice of a commencement speaker in American Universities is based quite frequently on worldly accomplishments, rather than being based solely on formal, university-centric, accomplishments. It is as it should be: Even the purpose of formal education is to assist the graduates in helping the world along anyway.

Years ago, we heard Steve Jobs giving a moving commencement speech for Stanford students in 2005. The latest example in 2012: Nipun Mehta, Founder Of Service Space, Delivers Inspiring Graduation Speech To Students At The University Of Pennsylvania. Neither of these have earned PhDs, but both have exhibited a lot of unconventional thinking.