People getting reimbursed for FB losses

Is this actually true? I'm doubting it. I never once got reimbursed for a losing trade. I guess I should just be dumb and buy bloated messes like FB. That way I can sue for my own stupidity.

It better not be true.

To me that breaks the sacred dicta of risk and reward. If someone invests in Facebook and loses money because it's a bad company then they should bear that loss and not expect a refund. Or they should just go occupy something, maybe serve me an icecream at Macdonalds.

jacknapier said:

Is this actually true? I'm doubting it. I never once got reimbursed for a losing trade. I guess I should just be dumb and buy bloated messes like FB. That way I can sue for my own stupidity.

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In some cases yes. The primary institutional underwriters have a tacit agreement with their respective governments to make up any shortfall in profits due to unexpected, excessive or outlier risk events. The compensation is not direct or specifically appropriated, but packaged along with all other debt that is considered unfair or unwanted and repaid on an ad hoc basis.

The market makers will make back what they pay now to cover losses by shorting the stock and buying it back cheap after maybe 3 years.

enragedcow said:

It better not be true.

To me that breaks the sacred dicta of risk and reward. If someone invests in Facebook and loses money because it's a bad company then they should bear that loss and not expect a refund. Or they should just go occupy something, maybe serve me an icecream at Macdonalds.

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It is our own decision which makes us decide whether we are going to i nvest any any company XYZ or not and what will be the potential returns for doing so.

We are the ones who are responsible for any loss afterwards

The main underwriters are reimbursing their own clients as they apparently intentionally withheld information that was extremely prevalent to the valuation.