As Facebook IPO Approached, the Stock of “Physicians Formula Holdings” Soared

Jun 7, 2012
J. Webster
Comments Off on As Facebook IPO Approached, the Stock of “Physicians Formula Holdings” Soared

As Facebook IPO approached, “FACE” (stock of unrelated company Physicians Formula Holdings) jumped 22% & volume jumped 18x. How many times does it pay to be lucky rather than good?

This is just brilliant on a number of different levels. First off, if you bought FACE instead of FB you’d be doing much better right now. Second, it shows the sort of desperation or eagerness of the public to jump on IPOs and in doing so made some rookie mistakes. Except in this case, if you made a mistake you got lucky.

From March 26th to May 3rd FACE had an average trade volume of 11,657 shares. May 4th Bloomberg published its widely reported article about how the upcoming Facebook IPO would make Zuckerberg one of the richest people in the world. On May 4th, 212,000 shares of FACE were traded (an 18x increase) and the price jumped from 3.10 to 3.79, up 22%. [chart]

Maybe it’s not that surprising, considering even news articles in Yahoo! Finance can’t keep the companies straight.

Accidentally confusing the two stocks isn’t all bad. In fact, if you accidentally bought FACE instead of FB, you’re doing much better.

(Yes, FACE’s 10-Q came out the previous day, but past 10-Q releases didn’t result in any sudden increase in trading volume at all: 11/3/2011, 8/4/2011, 5/5/2011) (Reddit)

Hat tip to Evelyn Rusli and Ben Schaechter for pointing me to the Reddit page.

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