Following a report on Wednesday's NBC Nightly News about the
dropping value of Facebook's initial public stock offering and possible
investigations into what went wrong, anchor Brian Williams saw an
opportunity to adopt the talking points of the left-wing Occupy Wall
Street movement: "Is this a case of the rich get richer, another advantage to the 1%...?"
Williams posed that question to New York Times reporter and
CNBC host Andrew Ross Sorkin, who enthusiastically added to the class
warfare rhetoric: "Boy does it feel that way, Brian. This is that and
probably a lot more. And it couldn't come at a worse time given the
enormous distrust that the public has of Wall Street. And it goes to this sense of fairness. This is the ultimate 1% versus 99% all over again."
Opening
the broadcast, Williams proclaimed: "The Initial Public Offering of
Facebook stock got a lot of attention. It was breathlessly hyped and
while it did make some people rich, it was also botched from the start."
What Williams failed to mention was that he helped create that "hype." On the May 15 Nightly News,
Williams enticed viewers as he touted predictions of how much Facebook
could soon be worth: "They are about to sell stock in an initial public
offering. That means the value of the company may well be set at $100
billion, making it more valuable than Disney, Kraft Foods and Ford Motor
Company, to name a few."
During Wednesday's report, correspondent Tom Costello explained: "Now
allegations from journalists and investors that Morgan Stanley, the
IPO's lead bank, may have informed only its most valuable clients that
it had a negative view of Facebook's growth prospects, leaving average
investors in the dark." That was followed by a sound bite of CNBC Mad Money
host Jim Cramer demanding: "If the allegations are true, then the SEC
has to come in to Morgan Stanley and demand the heads of everybody who
has involved with this deal."
In another sound bite, Max Wolff of Greencrest Capital Management
lamented: "It looks pretty clear that main street believes Wall Street
is a place that's low on scruples and high on get-rich-quick schemes
that are often at the expense of the mom and pop investor."
The hand-wringing about Wall Street continued on Thursday's NBC Today,
as co-host Ann Curry teased: "New fallout. Congress gets involved in
the investigation of Facebook's troubled IPO as new lawsuits are filed."
In another report by Costello, Wolff argued: "Wall Street still hasn't
figured out that they have to re-win the confidence and faith of the
public. And everything like this episode of the Facebook IPO sets that
back, makes it harder, and really begins to rouse suspicion and anger in
a time when it cannot be afforded by the industry." CNBC's Bob Pisani
followed: "It's another black eye for Wall Street and another
disappointment for the average investor."
Co-host
Matt Lauer discussed the topic with Business Insider editor Henry
Blodget and NBC News legal analyst Savannah Guthrie. To Gutrhie, Lauer
wondered: "I mentioned Congress getting involved. Can they just – can
they do more than make it uncomfortable for these big banks? Do they
have legal teeth here?" Guthrie replied: "They can subpoena documents.
They can certainly regulate. There's a potential of an SEC enforcement
action."
Lauer observed: "...one of the reasons so many people got so excited
about this, they like investing in products that they use. And 900
million registered users of Facebook, a lot of those people said this is
a great idea."
However, like Williams, Lauer conveniently ignored Today's
hyping of the stock. On May 17, Lauer announced: "Facebook founder Mark
Zuckerberg isn't the only person set to profit from tomorrow's Initial
Public Offering. Hundreds more, including some rank-and-file employees,
are primed to become rich as well."
Correspondent Ron Mott followed: "Hitting the lottery is not the only
way to become a millionaire overnight. Another way is to join a start-up
company like Facebook, get in on the ground floor and then just wait
for it to hit the big time, which it obviously has....Hundreds of the
company's employees are estimated to see their net worth explode into
the tens of millions of dollars on Friday."
Like the Facebook flop, NBC used recent losses at JPMorgan Chase [1] to push the Democratic agenda of expanding government regulation of the private sector.
Here is a full transcript of the May 23 Nightly News coverage:
7:00PM ET TEASE:
BRIAN WILLIAMS: The Facebook fiasco. More troubling questions tonight
about Facebook's debut on Wall Street. Were new share holders kept in
the dark?
7:01PM ET SEGMENT:
WILLIAMS: It's only been a public company since Friday and yet tonight,
the headlines surrounding Facebook are along the lines of, what went
wrong? The IPO, the Initial Public Offering of Facebook stock got a lot
of attention. It was breathlessly hyped and while it did make some
people rich, it was also botched from the start. And now some
shareholders and remember, there have only been shareholders for four
trading days, are suing this newly public company because some have
learned that some folks had inside information prior to the sale, and
many people now feel a bit hung out to dry by a 28-year-old billionaire
and the sprawling social media company he runs. It's where we begin our
coverage tonight with NBC's Tom Costello.
TOM COSTELLO: What happened to Facebook, the most anticipated initial public offering or IPO in years?
MELISSA LEE [CO-HOST, CNBC'S SQUAWK ON THE STREET]: The odds
are stacked against you. And if you're not an insider on Wall Street,
you are going to be left in the cold, holding the bag. And that's
exactly what happened here.
COSTELLO: It's been the talk on Wall Street. First, an embarrassing
NASDAQ technical glitch that delayed the IPO, then the stock's
performance. Opening at $38, popping to $45, and then plunging to $31.
Today, closing at $32. All the while, mass confusion as many investors
were unable to confirm trades, buy or sell the stock. Now allegations
from journalists and investors that Morgan Stanley, the IPO's lead bank,
may have informed only its most valuable clients that it had a negative
view of Facebook's growth prospects, leaving average investors in the
dark.
JIM CRAMER: If the allegations are true, then the SEC has to come in to
Morgan Stanley and demand the heads of everybody who has involved with
this deal.
COSTELLO: Morgan Stanley insists it "followed the same procedures for
the Facebook offering that it follows for all IPOs." Already though, the
lawsuits are mounting. Facebook says the suits are "without merit and
will defend ourselves vigorously." Today, the Senate Banking Committee
began asking questions as Massachusetts subpoenaed Morgan Stanley's
internal documents, all of it, further undermining faith in Wall Street.
MAX WOLFF [GREENCREST CAPITAL MANAGEMENT]: It looks pretty clear that
main street believes Wall Street is a place that's low on scruples and
high on get-rich-quick schemes that are often at the expense of the mom
and pop investor.
COSTELLO: All of this as Congress considers tougher oversight of the
financial sector. Something Wall Street has been lobbying hard to avoid.
Tom Costello, NBC News, Washington.
WILLIAMS:
Let's talk about this a bit more with Andrew Ross Sorkin, New York
Times journalist, author of the book Too Big to Fail, and co-anchor, of
course, of CNBC's Squawk Box. He's with us here in the studio
tonight. So, correct me if I'm wrong. Is this a case of the rich get
richer, another advantage to the 1%, mitigated, or aggravated perhaps,
by the fact the stock is down from where it came out?
ANDREW ROSS SORKIN: Boy does it feel that way, Brian. This is that and
probably a lot more. And it couldn't come at a worse time given the
enormous distrust that the public has of Wall Street. And it goes to
this sense of fairness. This is the ultimate 1% versus 99% all over
again. This idea that the playing field is not level, that certain
people, certain investors, are getting access to information and the
other guys, main street, isn't getting the same information. And who's
holding the bag? It's the greater fool theory. In an IPO, somebody's
buying and somebody's selling. But in this case, the public is the one
that's the buyer. And in that case, maybe they were the fool in this
case.
WILLIAMS: And in the meantime, the stock price is down.
SORKIN: Exactly. And that's the toughest part about it.
WILLIAMS: Andrew Ross Sorkin, as always, thank you for stopping by.
SORKIN: Thank you, Brian.
-- Kyle Drennen is a news analyst at the Media Research Center. Click here [2] to follow Kyle Drennen on Twitter.