Much hay is being made about that fact that Facebook founder Mark Zuckerberg and other insiders were able to sell some of their shares in the company on the open market as soon (if not just before, which I suppose is a point requiring investigation) as the company’s stock began public trading.

As I understand it, the insiders’ plans to do this were clearly disclosed in the S-1 prospectus.

We’re supposed to believe that there’s nothing unusual about what they did.

That is flat-out wrong, as Investopedia explains:

When companies “go public”, the number of shares offered in the initial public offering (IPO) is typically a relatively small portion of the overall ownership. The balance of the shares is held by insiders, which include management, founders and venture capitalists (VC) who funded the company while it was private.

The exact number of shares that is offered in each IPO will differ from company to company. For example, in 2004, Google offered 7% of its shares to the public, while Vonage offered 20% of its shares to the public during its 2006 IPO.

… although the number of shares offered will differ from one IPO to another, nearly all IPOs have some sort of lock-up period. A lock-up period is a caveat placed on insiders and pre-IPO holders that prevents them from selling their shares for a set period of time after the company has gone public. A typical lock-up period is four to six months.

My understanding and experience (admittedly a bit dated) is that it’s not at all unusual for lock-up periods to be as long as two years.

Continuing:

There is no federal law or Securities and Exchange Commission requirement that forces insiders or pre-IPO shareholders to be “locked up”, but the investment banks underwriting the IPO almost always request it so that insiders do not flood the market with shares right after the company’s initial public offering. The lock-up in the prospectus (Form 424B4) is a contract between the insiders and the purchasers of the IPO, so it is highly unlikely that it would be violated.

This information is disclosed in the S-1 when the IPO documents are filed with the SEC. The best sources for lock-up information are the SEC website and several paid services including Edgar Online. The lock-up period will be stipulated in the prospectus, called the S-1, but it is very important that investors watch each revision of this document, called S-1As, because there could be a change in the lock-up terms.

… As a company goes public, underwriters want to be able to see what outside investors believe the new entity is worth based on information like that found on the balance sheet, the income statement (profits and losses) and executive overviews of the business (business risks).

If inside investors are allowed to sell immediately at the time of the IPO, it may well obscure the price that the markets put on the company by putting selling pressure on the shares on the first day of trading.

Hmm. Isn’t that what just happened?

All of this in my view raises serious questions about the Facebook IPO:

• Why did the founders and other key players insist on avoiding the normal lock-up?
• Why did the underwriters let them? It’s against the underwriters’ interest to allow this, because doing so makes it in the founders’ personal self-interest (even beyond already-existing corporate self-interest) to overvalue the company and to fudge the financial and nonfinancial data to support the overvaluation. In Facebook’s case, the nonfinancial data about hits, subscriber growth, and the like are particularly important. If enough of the ownership stake is involved, it also exposes the public to the founders losing interest in managing the company well.
• Does the founders’ and other key players’ insistence on no lock-up period betray a fundamental lack of faith in Facebook’s long-term prospects? I don’t see how you can interpret it any other way.
• Finally, a free-market believer would certainly agree the SEC can’t (and at least in theory shouldn’t) stop such an arrangement — unless there is some kind of conflict of interest with the potential to shortchange the public involved. Was there? A clear possibility exists. Goldman Sachs was a major investor in Facebook, is a major underwriter of IPOs, and a major investor in other businesses. The lack of a lock-up period would seem to have benefit Goldman Sachs bigtime. The rest of the underwriting community may not have had the gumption to challenge what should have been challenged because it needs Goldman’s cooperation to make other IPOs and investments happen.

Here we go again. The State of California’s budget is again in crisis, facing a budget deficit of $16 billion, which is $6.8 billion higher than projected mere months ago. Governor Jerry Brown is browbeating residents to pass tax initiatives in November which include “a quarter-cent increase in the state sales tax for four years and a seven-year hike on incomes of $250,000 or more that will range from 1 to 3 percentage points.”

The totally predictable problem (and, from all appearances, a bit contrived; the state’s controller saw this coming several months ago, and was largely ignored) is that tax revenues aren’t coming in as expected. Media treatment of the problem acts as if this all some kind of uncontrollable act of God which is a by-product of the recession and weak recovery.

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Searches on “Government Accountability Office” (not in quotes), “shale,” and “mittal” at the Associated Press’s national site return nothing relevant to the energy-related story which will follow. A Google News search on “Anu Mittal,” the person from the GAO who on Thursday testified before the House Committee on Science, Space, and Technology`s Subcommittee on Energy and Environment, appears to return seven relevant items, but it’s really five. The first is a press release from the Luddite (aka Democratic) members of the committee pooh-poohing the importance of Ms. Mittal’s assertions. The other four are from non-major and/or non-establishment press sources: Newser, American Thinker, Daily Markets, and the Inquisitr (yes, spelled correctly). Only one other news outlet I’m aware of, Media Research Center’s CNS News, has also noted Ms. Mittal’s testimony.

What Ms. Mittal had to say is that, according to a leading research organization, just one area overlapping three states in the West (not the Midwest, as a couple of the other links assert) has an astounding quantity of recoverable oil:

… Oil shale deposits in the Green River Formation are estimated to contain up to 3 trillion barrels of oil, half of which may be recoverable, which is about equal to the entire world’s proven oil reserves.

… The Rand Corporation, a nonprofit research organization, estimates that 30 to 60 percent of the oil shale in the Green River Formation can be recovered. At the midpoint of this estimate, almost half of the 3 trillion barrels of oil would be recoverable.

The biggest problems is that the reserves are primarily on federal land. Instead of being pleased at the prospect of approaching energy independence, the environmental extremists who control policy in the Obama administration are probably already working on how to lock the area up so no one will be able to touch it even after they’re gone.

Ms. Mittal cited very real concerns about advances in technology required to make the oil recoverable at costs below current market prices, but also raised “sustainability” concerns which appear to yours truly to be mostly bogus. They’re the types of concerns (lots of people moving into currently low-population areas, related infrastructure concerns, and the like) which would have caused the hand-wringers and anti-progress zealots to shut off oil development in North Dakota, if they could have. But they didn’t, and though the state is enduring some growing pains, it’s still there, and it will get back to a manageable equilibrium not as soon as everyone would like, but soon enough.

The media bias points in this post are these:

• Ms. Mittal’s testimony isn’t news in any establishment press outlet — In addition to the searches cited in the first paragraph, nothing relevant was found in a search on Ms. Mittal’s last name at the New York Times, Washington Post, or Los Angeles Times.
• Of the outlets which did cover it, two of them gratuitously brought the Iraq War into the discussion. Newser’s Neal Colgrass wrote: “Maybe President Bush should have invaded the Midwest instead of Iraq.” Residents of Utah, Colorado, and Wyoming will be amused to learn that Colgrass believe that their states are in the Midwest. They’re not. Similarly, the unbylined Inquisitr report snarked that “While the United States has invaded much of the Middle East in search of lower gas prices, perhaps President Bush should have been focusing his efforts on the Midwest region of the United States during the first Iraq war.” Media bias clearly runs very deep — miles deep, if you will.
• Even at American Thinker, Rick Moran seemed unduly pessimistic about the economic feasibility of recovery. One contrarian commenter at AT suggested that “The majority of the oil cited is economically recoverable using current technology.” In something I attempted to confirm but couldn’t, another wrote that “This shale oil is being recovered today in Utah by Newfield Energy.” The company has Utah operations, but I found nothing directly citing Utah shale operations.

Meanwhile, anything which even remotely seems to support the in reality nonexistent case for global warming gets preferential treatment from the establishment press — which can only lead one to conclude that many journalists and the Democrats who feed them news leads would rather see the nation economically dependent and energy-starved than energy-independent and prosperous.

Cross-posted at NewsBusters.org.

If the people who run the Washington Post Company need an archetypal example of why their newspaper publishing segment is in so much financial trouble (as found here: a $22.6 million first-quarter 2012 loss following on the heels of an $18.2 million loss for all of 2011) and is bleeding customers (per the Audit Board of Circulations, the paper’s daily and Sunday circulation dropped by 7.8% and 15.7%, respectively, during the year ended March 31), they only need wonder why the paper’s editors tasked Jason Horowitz, with help from Julie Tate, to produce what turned into a 5,400-word writeup (“Mitt Romney’s prep school classmates recall pranks, but also troubling incidents”) on Mitt Romney’s high school years in the mid-1960s which appeared Thursday.

One can tell by the headline alone that it’s an attempt at a hit piece. Horowitz led with the most damning incident he could find, and somehow gave it anti-homosexual overtones:

… John Lauber, a soft-spoken new student one year behind Romney, was perpetually teased for his nonconformity and presumed homosexuality. Now he was walking around the all-boys school with bleached-blond hair that draped over one eye, and Romney wasn’t having it.

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The Cleveland Plain Dealer is the only daily newspaper in Greater Cleveland (2010 population: 2.08 million). According to the latest “Top 25″ release from the newspaper industry’s Audit Bureau of Circulations (ABC), its average daily circulation for the six months ended March 31, including about 14,300 digital-only subscribers, dropped to 246,571. The “PD” is Ohio’s only newspaper in the ABC’s Top 25.

That’s a 28% drop from six years ago, when the paper’s daily circulation was 343,163. It’s almost certainly the first time in decades that the paper’s daily circulation has gone below a quarter-million.

The news about Sunday circulation at the “PD” isn’t so bad. Five years ago, Sunday circulation was 442,482. The March 31, 2012 Sunday figure has two components: “Regular” circulation is 340,570, supplemented by 60,564 copies of a “branded” edition known as the “PD Wrap-up,” a Sunday-only publication containing what a PD circulation employee described as “select content” targeting specific zip codes. The combined total of just over 401,000 is only 9% lower than the 442,482 figure from five years ago. Top-tier papers in many other towns have seen drops of 30% or more during that time.

Like almost every major newspaper nationwide, the Plain Dealer is having a hard time figuring out how to catch eyeballs in the digital age, let alone how to turn a profit on them. But the bleeding elsewhere is in many cases has been much more severe. At the once thought indispensable Washington Post, daily and Sunday circulation were down by almost 8% and and over 15%, respectively, in the past twelve months — and I believe it’s accurate to say that the PD doesn’t have the kind of problem the WaPo has with excessive compensation, namely one of “paying six-figure salaries to scores of people whose output averages no more than a few hundred words per day.”

At the New York Times on Saturday (in Sunday’s print edition), reporters Charles Duhigg and David Kocienewski, in a report riddled with conceptual flaws and misleading statistics, bemoaned “how technology giants have taken advantage of tax codes written for an industrial age and ill suited to today’s digital economy.” They focused their attention almost entirely on Apple, seemingly in simultaneous awe and disgust at how “Apple’s accountants have found legal ways to allocate about 70 percent of its profits overseas, where tax rates are often much lower, according to corporate filings.”

Well guys, a look at Apple’s latest 10-K annual report to the Securities and Exchange Commission on Page 73 reveals that Apple’s net sales in “The Americas” geographic segment — from the northernmost portion of Canada to the southernmost tip of Chile — in the year ended September 24, 2011 were $38 billion out of a companywide total of $108 billion. Apple doesn’t segregate U.S. sales, but it would seem that they probably aren’t any more than $30 billion of that $38 billion. So the vast majority of Apple’s sales are “overseas.” An even larger majority is outside of the U.S. Even after allowing for aggressive tax-avoidance maneuvers, why should it surprise anyone that the large majority of profits are also earned overseas?

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In the first quarter of 2012, the federal government spent $966 billion. That’s 10% more than the $877 billion spent during the previous quarter, and 2% more than the $949 spent during the first quarter of 2011.

Yet the party line Friday evening from Christopher Rugaber and Paul Wiseman at the Associated Press, aka the Administration’s Press, is that economic growth in the first quarter, which the government preliminarily told us yesterday was an annualized 2.2% (trailing consensus estimates of 2.6%), was so mediocre because of “government budget-cutting.” A closer look indicates that if anything, they should have tagged it as defense budget-cutting and never did; the rest of government spending continues to balloon out of control. The pair’s opening six paragraphs follow the jump.

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There are a few Democrats in Vicki Smith’s coverage at the Associated Press, aka the Adminsitration’s Press, of the fraud investigation of former Mine Safety and Health Administration Director J. Davitt McAteer. As is AP’s derelict custom in cases where Dems are involved in scandal or corruption, the party affiliation of those Democrats isn’t mentioned.

The first Democrat is McAteer himself, who, based on a review of Federal Election Commission records, given roughly $1,900 to various Democratic Party candidates and causes during the past 13 years, including contributions to the party’s presidential nominees in 2000, 2004, and 2008. Then there’s West Virginia Senator Joe Manchin, who was previously the state’s governor. Finally, although the AP gets a pass for this (it’s Sunday, and we’re in a forgiving mood), the name and administration of Democrat Bill Clinton, the guy McAteer worked for when he headed MSHA, never comes up. Excerpts from Ms. Smith’s party ID-free report follow:

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As of 11:55 a.m., a search at the Associated Press’s national site on “Cleaver” returns nothing related to an April 6 story reported at the Kansas City star (HT Nice Deb via Gateway Pundit) that Bank of America has sued Missouri Congressman and Black Caucus Chairman Emanuel Cleaver for repayment of a $1 million-plus loan relating to a car wash.

The KC Star didn’t exactly provide exemplary coverage in its report. One would think from reading the story’s headline and first two paragraphs that Bank of America and the congressman are having some kind of difficult conversation. In paragraph 3, we finally learn that there really is a lawsuit involved. It took the Star seven paragraphs to indicate that taxpayers may be on the hook and eight paragraphs to tag Cleaver as a Dem (impact-minimizing words in bold):

(headline) Bank wants Missouri Rep. Cleaver to pay $1.5 million on car wash loan

U.S. Rep. Emanuel Cleaver’s car wash headache is raging once again.

The bank that loaned the Kansas City congressman and his wife $1.3 million in 2002 to buy the Grandview Auto Wash at 12204 Blue Ridge Extension is now demanding payment of more than $1.5 million, after the Cleavers repeatedly fell behind on repaying the loan.

The suit, filed last week in Jackson County Circuit Court, said the demand for repayment came after three attempts to delay foreclosure. Bank of America also is seeking attorney’s fees and a receiver to protect collateral.

“The Cleaver Company failed and refused, and continues to fail and refuse, to pay the outstanding obligations due and owing … under the note and other loan documents,” the lawsuit said.

In an email statement, Cleaver said, “This is a business dispute. The business has been run by an outside manager for years.” He said because it was a legal matter, he would have no further comment.

According to court documents, the outstanding principal totals $1.2 million with interest totaling $240,545 as of March 6. Late fees have reached $54,587. Both Cleavers had personally guaranteed the debts, according to the suit.

The loan was originally part of a Small Business Administration program. It was not clear Thursday how much money, if any, taxpayers will have to provide if the loan defaults.

The car wash became a hot topic when Cleaver, a Democrat and former Kansas City mayor, ran for the U.S. House for the first time in 2004.

Awww, the poor guy. He has a “headache” because a bank “wants” a loan to be repaid.

The Start never identified Cleaver as CBC Chairman.

Those who followed the run-up to the passage of ObamaCare in the House in March 2010 may recall that Congressman Cleaver was among those who originally claimed to have been spat upon by Tea Party-inspired protesters. Despite mountains of videos taken of the march through the protesting crowd by Cleaver and others, no definitive evidence supporting Cleaver’s claim ever materialized. A $100,000 pledge by the late Andrew Breitbart promised to anyone who could provide such proof was to my knowledge never claimed.

There is virtually no doubt that a Republican or conservative in similar circumstances would have had his or her party tagged early, would have had his or her congressional leadership capacity promptly identified, and would have been the recipient of national AP coverage.

Cross-posted at NewsBusters.org.

And those of us paying attention knew both of these things in 2008 (fossil fuels, success).

Via Larry Kudlow at National Review:

There Obama Goes Again
He hates fossil fuel, and he hates success.

As Ronald Reagan famously said, “There you go again.”

… “there you go again” can apply equally to President Obama. Once again this week, the president was out on the campaign trail bashing and oil and gas companies. And he continued to spread major falsehoods about this industry, which I guess is the polite way to put it.

Obama is obsessed with oil and gas. He is a prisoner of the left-wing environmental groups. And really, he’s extending his leftist class-warfare attack from rich people to successful oil and gas producers.

… Oil companies have an effective corporate tax rate well above 40 percent. And they operate within one of the highest-taxed industries in America. According to the Tax Foundation, for more than 25 years, oil and gas companies have sent more tax dollars to Washington and state capitals than they earned in profits. That’s a fact.

Single-handedly, oil and gas companies finance over 10 percent of non-defense discretionary spending within the U.S. budget. According to the Wall Street Journal, ExxonMobil, the world’s largest energy firm, paid out $59 billion in total U.S. taxes over the five years prior to 2010 while earning only $40.5 billion in domestic profits.

… Make no mistake about it: Fossil fuel is going to drive the American economy for decades to come. Green energy is not.

Obama’s other line of attack is that oil companies shouldn’t get any subsidies.

… But on the subject of subsidies, so-called renewable-energy subsidies (think Solyndra) are 49-times greater than fossil-fuel subsidies, according to studies by the Congressional Research Service. And the Congressional Budget Office says renewable green energy received 68 percent of energy-related tax preferences in fiscal year 2011, while fossil fuels got only 15 percent. Additionally, oil, natural gas, and coal received 64 cents per megawatt hour in subsidies, while wind power alone received $56.29 per megawatt hour. That’s 100-times what fossil fuels got.

Not that it’s ever a good idea, but especially in a struggling economy, actively impeding real, beneficial fossil fuel-based energy production and progress is not a luxury we can afford.

“Doubling down” on barely 2% of the private workforce.

_____________________

Note: This column went up at PJ Media and was teased here at BizzyBlog on Friday.

_____________________

Fresh off attempting to tell us that the employment situation for blacks and Hispanics is getting so much better — when it isn’t — Uncle Sam’s Bureau of Labor Statistics (BLS) has compiled its first estimate of how many “green jobs” there are in the economy. The spirit of 9/11 truther Van Jones, who also said we deserved the September 11 attacks two days after they occurred, and was also the White House’s green jobs czar for a time during 2009, apparently lives on.

The BLS couldn’t even get through the first paragraph of its new report without slinging the BS. It claimed that in 2010, “3.1 million jobs in the United States were associated with the production of green goods and services (GGS),” specifically those which “are found in businesses that produce goods and provide services that benefit the environment or conserve natural resources.”

Businesses? Far from entirely: “The private sector had 2.3 million GGS jobs and the public sector had 860,300.” The 2.3 million represents about 2.1% of all private-sector employment. Assuming BLS’s figures are right (if anything, they’re high), the Obama administration and the Democratic Congress which enabled it has been staggeringly irresponsible in throwing so much money at that portion of the economy. 7.7 million seasonally adjusted private-sector jobs were lost from January 2008 until June 2009, the official end of the recession; overall job stagnation continued for twenty months after that. Even if Team Obama thought they could increase GGS employment by 50%, and bravely assuming they could manage such an enterprise (it has been since shown beyond doubt that they didn’t know what they were doing), it still would have only replaced 15% of the jobs lost.

Thursday, President Obama, in bashing “subsidies” to oil companies which mostly represent legitimate deductions for money actually spent, insisted that the nation should “double-down on investments in clean energy technologies that have never been more promising.” They’ve learned nothing.

Government employees, who, last time I checked, do not work for “businesses,” held over 27% of GGS jobs in 2010 and made up almost 4% of the public workforce. No wonder governments at all levels latch onto every environmental initiative they can, as “being green” has significantly contributed to out-of-control public workforce bloat and public unions’ political power.

Quite a few public-sector “GGS” jobs not only produce nothing and provide no meaningful service; they also generate ream after ream of useless paper pronouncements while consuming ginormous amounts of energy-hogging bandwidth. BLS says that the public administration sector at state governments alone had 141,700 green jobs in 2010, which included “the enforcement of environmental regulations and the administration of environmental programs.” It really is a wonder that the private sector produces anything at all.

One thing at which the “green” portion of the public sector has become particularly adept is burning through taxpayer money. The Environmental Protection Agency now spends about $11 billion per year, up from an already ridiculous $8 billion three years ago. The EPA has nearly completed what it will consider the signature accomplishment of its 41-year existence if successful — the implementation of “a proposed rule for greenhouse gas emissions from new power plants … (which) experts believe ‘effectively bans new coal plants‘ in the United States.” In 2008, candidate Obama said he wanted to bankrupt companies if they tried to build new coal-burning plants. Since Congress wouldn’t create that situation by passing ruinous cap and trade legislation, Mr. “We Can’t Wait” is having the EPA do it for him.

When it comes to direct waste tied to GGS jobs, the Department of Energy (DOE), which produces no energy, knows no peer.

In early September 2011, the Washington Post reported that the 2009 stimulus plan’s $38.6 billion loan-guarantee program targeting green energy companies “has directly created 3,545 new, permanent jobs after giving out almost half the allocated amount.” Let’s see; $18.8 billion (the actual amount disbursed at the time) divided by 3,545 works out to $5.3 million per job. We’d have been much better off paying each new worker a couple hundred grand a year just to stay home.

Oh, but this is all supposedly okay, because these are only “loan guarantees.” Most of the money will get paid back, and the government won’t lose all that much, right? Wrong. Think Solyndra, Beacon Power, Ener1, and at least a half-dozen others. And they’re not done: The Wall Street Journal reported on March 23 that DOE “has placed nearly one-third of its clean-energy loan portfolio (10 of 32) on an internal ‘watch list’ for possible violations of terms or other concerns.” I suspect that there’s little reason to feel good about the other 22.

Subsequent events have shown that the administration’s green jobs obsession has been a monstrous waste of time and money on two levels. First, experience in the real world outside of rigged computer models based on missing raw data has shown that the link between atmospheric carbon dioxide levels and alleged global warming is weak at best. CO2 has been increasing, but there’s been no net warming since 1998.

Second, fossil-fuel resource discoveries and recent advances in extraction technology have been so dramatic that, according to a recent report by Citigroup analysts, it is not unreasonable to believe that “North America’s production of oil and natural gas liquids (can) almost double to 26.6m barrels a day by 2020.”

That won’t happen if Obama and his bunch remain in charge after January 20, 2013 — which is yet another reason why the nation’s voters can’t allow it to happen.

File under “Rush 1; Entire Liberal Universe, up to and including 0″ (HT American Glob):

Key point (begins at 1:35 mark):

… on the range of all 600 radio stations, our ratings are up anywhere from 10% to 60% … we’re up 50% in a number of places.

The advertisers who hung in here are going gangbusters. … The only ones who got hurt are the ones who left. That’s its own tragedy because they left under false, trumped-up, unreal pretense.

Talk shows may start lining up around the block at the front door of Media Matters begging the group to organize a campaign against them.