Tuesday, May 29, 2012
Monday, May 28, 2012
Sunday, May 27, 2012
Saturday, May 26, 2012
IT BUSINESS: Losing money at Facebook IPO
Facebook’s initial public offering has many people asking: “If I want to buy shares, how do I do it?”
We at CNNMoney wondered the same thing, so we decided to find out the direct way: by trying to buy a small handful of Facebook shares. Three of our reporters — Catherine, Julianne and Stacy — opened accounts at three online brokerages (E-Trade, Charles Schwab and Zecco). We’re keeping a running blog on our progress.
We’re planning to hold on to our shares for one week, then sell them off on Friday, May 25. If we have any gains from the experiment, they’ll be donated to The Time Is Now To Help, a CNN Heroes Top 10 honoree.
Here’s an important disclaimer: We’re not recommending Facebook as an investment; we’re buying in simply to illustrate how the process works. Anyone considering buying Facebook shares should read through the company’s IPO prospectus, which describes Facebook’s financial condition and its risks. (The short version: The future is mysterious, and Very Bad Things can happen to companies. So don’t, like, bet your college fund on this IPO.)
Here we go …
Quick links to jump to our trading milestones:
How an IPO worksOpening a E-Trade account
Our failed attempts to get IPO shares at Schwab, E-Trade and Zecco
New plan: We’ll buy on FridayJulianne’s Zecco account vanishesWe own 2 shares!
Our final tally: 4 sharesUntangling the mess
Selling off our shares
Tallying the losses
Friday, 2:45 pm: Our long, strange trip has come to an end. Buying! Selling! Lawsuits! Weird tech problems! And…a bunch of losses.
For those keeping score at home, you’ll remember from the last post that Stacy lost $27.37 on her single Schwab trade (including commission and other fees).
Catherine got shares close to the IPO price, at $38.01, but she still lost out. First, she paid a $30 fee to fund her E*Trade account. Then she placed two separate buy orders, which cost $9.99 each in fees. She sold each share at a $5.10 loss, plus a single $9.99 commission fee for the sale. Total loss: $70.17.
Julianne wasn’t even able to buy a share because she couldn’t get her Zecco account funded. She had to mail in a $30 check to pay Zecco’s penalty fee. Total loss (including a stamp!): $30.45.
Belinda was dragged into our experiment after Julianne’s attempt failed, and she’s hanging onto the share she bought on Sharebuilder at $42 each. She’s hoping to hang on until Facebook’s stock price gets back above water.So, tallying up the first three accounts gives us -$127.99.
But, given that we were going to donate our gains, we’re going to switch that to a positive sign and donate $128 to The Time Is Now To Help, a CNN Heroes Top 10 honoree.
All in all, it’s been a great learning experience for us — especially considering that Facebook’s IPO was so fraught with problems — and we hope you enjoyed it too. Thanks for following along with this uber-long Tumblr post. Maybe we’ll all become millionaires next time.
Friday, 11:30 am: As promised, we sold off our Facebook shares after one week.
Catherine, who scored a share close to the IPO price ($38.01), sold at market open for a 13% loss. Check out her full story here on our new investing page, The Buzz.
Next up was Stacy, who put in a sell order after the market opened:
“Wow, so that’s what it’s like when an order executes immediately. At 9:43 am, I put in a sell order for my share. A second later, it’s done: The share I bought for $42 vanishes back into the market at $32.53.
Total tally: I’m down $9.47 on the stock loss, and $17.90 on trading commissions ($8.95 each for buying and selling), for a total loss of $27.37.”
Belinda, who bought her Facebook share on her own and joined our experiment at the last minute to pinch-hit for Julianne, is keeping the share she bought at $42. She’s planning to hang on until it’s above water again.
As you might remember, Zecco is charging me a fee because my checking account didn’t link correctly and couldn’t transfer money to my trading account. A customer service rep couldn’t figure out why, and I’m still not sure what happened.
So this brings my nonadventure to a close, and I’m out $30 plus the cost of a stamp. But: When you factor in trading platforms’ fees, plus the fact that Facebook’s stock has fallen significantly since its IPO, I’d likely have lost the same amount if I’d been able to snag a share.”
Thursday 5/24/12, 10:55 am: Wow. That turned into a mess.
Nasdaq’s admission Monday that it suffered a “technical error” was the first official confirmation that things went way screwy on Friday. Over the past few days, the depths of the debacle became clearer, and we learned that our hugely delayed trade notifications were a ubiquitous problem. Even worse: Some people waited days to find out if their orders went through and at what price. Hibah heard from Fidelity, among others, that some of its order confirmations were still outstanding as of Tuesday night.Thursday 5/24/12, 10:55 am: Wow. That turned into a mess.
The price confusion got us wondering: Why did we get some of our shares at $42 and some at $30.01? All of our orders were placed well before 11 a.m., Facebook’s planned opening time.
Here’s the tick-tock on our trades: Stacy put in a $200 limit order on Schwab Thursday night. Belinda put in her buy order (with a $50 limit) at Sharebuilder at 8:30 a.m. Friday. Catherine put in a pair of limit orders ($50 and $150) on E-Trade just after the markets opened at 9:30 a.m. Friday.
Here’s the results: Stacy got a $42 share with a listed processing time of 2:17 p.m. Belinda got a $42 share, processed at 1:50 p.m. Catherine got two $38.01 shares, processed at 11:53 a.m.
Why the discrepancy?
This is the story from Schwab, which Stacy called to ask about her trade: Orders put in before the open are required, under regulatory rules (they said), to be filled at the opening price. For Facebook, that was $42. When Stacy tried to change her order around 2 p.m. — which at that point still appeared unfilled — it was already too late. The trade was locked in for execution at the opening price. (After the original trade finally posted, Schwab cancelled the change order.)
Translation: Just like the big traders, we were in the dark for hours about what shares we actually owned, and at what price.
So why did Catherine get shares at $38.01? We’re still not sure. Best guess: Since she submitted her bid after the market opened, it went into the queue for fulfillment right *after* Facebook’s opening trades. The stock almost instantly plunged, so she got lucky and caught the low.
Obviously, this is a pretty terrible way to run a stock market. Catherine spoke with several small investors with horror stories — “I lost $40,000!” one told her. One major market maker, Knight Capital, is estimating its losses stemming from the Nasdaq error at $30 million to $35 million.
Sounds like we’ll be lucky to come out of our experiment with a mere two-digit loss.
Monday, 2:15 pm: We’ll do a full gain/loss tally at the end of the day Friday, when we unload our 4 Facebook shares, but right now it’s not looking good: Shares have spent all day Monday trading below the $38 IPO price.
Nothing about this experiment went quite the way we expected — which is great, since that’s the whole point of experiments. The glitches we hit when we tried to buy shares through Schwab were apparently part of Nasdaq’s general screwiness, which was so bad that Nasdaq is revamping its IPO process to fix previously undiscovered technical bugs.
We also didn’t expect shares to drop so quickly below their IPO price. It was a great illustration of what many analysts warned (and what we reported! On Thursday!): IPOs are risky, and regular investors should exercise extreme caution before jumping on the bandwagon. Lots of readers contacted us before the IPO to complain about how “only insiders” would have access to the IPO price. ”Ordinary people are boxed out,” as one commenter put it. “And the US Gov’t allows these jerks to get away with it.”
Right now, a few of those insiders are probably wishing they too had been boxed out.
Friday, 4:21pm: Closing bell has rung, and the final price for Facebook is $38.23 — basically flat. Trading volume set an IPO record, though: 567 million shares changed hands. We’ll tally up where we stand shortly.
Friday, 3:37pm: Market maven/Buzz columnist Paul LaMonica suggests that for next week’s Tumblr experiment, we learn how to short shares.
Friday, 2:33 pm: There we go! Schwab finally executed: The trade went through at 2:17 pm at $42 per share. Our CNNMoney portfolio is finally complete, with our vast trove of 4 shares.
Friday, 2:24 pm: We’ve added a third share to our collection: Belinda’s Sharebuilder order went through at 1:50pm at precisely $42. But ouch — the commission on it was $16.90. Facebook is going to have to rise sharply for us to come out ahead on this deal. The actual commission is $9.95; the other $6.95 was a fee for rush-funding on the account.
Friday, 2:04 pm: Stacy went back to her Schwab page, where her order is still sitting and lingering. The story so far:
“Schwab’s page now has this notice up: ‘Facebook (FB) is now trading, although we are experiencing some issues with orders. These issues do not appear to be unique to Schwab. There are currently industry-wide delays in reporting trade executions. We apologize for the inconvenience.’
I’m not sure if I did something wrong in placing my order — it’s just sitting there. I hit ‘change’ to see what my options are. Schwab still won’t let me set a market order; it’s sticking with the ‘Schwab will only accept limit orders on the purchase of an IPO stock on the first day of trading’ line. I try switching the timing of my order to ‘fill or kill,’ and get another error: ‘A Fill or Kill order requires a minimum round lot order quantity (usually 100 shares).’ ‘Immediate or cancel’ is also a no-go — Schwab tells me it’s not a valid designation for Nasdaq orders. My two only options seem to be a ‘day’ order or sticking with ‘good until canceled.’
So I switch to that, and lower my limit to $50.
… and that seems to go right back to the holding queue. Still no share. Something seems screwy here.”
Friday, 1:41 pm: We’ve been loving the reader comments on this experiment, and we’re swapping emails with some fellow buyers. We chatted this morning with Tam Ha, a trader from Virginia who successfully snagged a piece of E-Trade’s allotment. Tam has been with E-Trade for four years and has assets with them “in the low six-figures,” but was IPO bidding for the first time. Tam put in for 550 shares and agreed to pay up to $39 each for them.
Result? Tam got 100 shares at the $38 IPO price. “My original plan was to sell maybe 200 or 250 shares within the short term to cover the cost,” Tam says. But with fewer shares in hand and a lower pop than many predicted, Tam’s plan is being revised: “I might keep them for a while and see how it goes.”
Friday, 12:31 pm: We own two shares!
Catherine’s E-Trade orders both went through at $38.01, just one penny more than the IPO price we tried and failed to get. Wow.
So far, volume has been wild — 282 million shares have changed hands already — but the price has been remarkably stable. We’ll keep our eyes on it. We’re now invested in this roller-coaster ride.
Friday, 12:22 pm: Finally had a break to go check our accounts. First up, Stacy’s Schwab … where the order is still sitting there, open but unexecuted. What the hell? Schwab has this notice up: “UPDATE: FB is now trading, although NASDAQ is reporting slowness in acknowledging orders.” Seems like it shouldn’t be this slow, though.
Friday, 11:34: Go time! Opening trade at $42.05. Time to see soon what we got and at what price …
Friday, 11:19 am: Now seems a good time to knock off for lunch, right?
Friday, 10:17 am: Here’s the tale from Catherine on finally getting her E-Trade order through.
“I tried four times unsuccessfully but refused to give up. Shortly after the U.S. markets opened, I logged my first victory! While eTrade says trading is ‘halted,’ it allowed me to place my two limit orders — one at $50 and one at $150. To echo Stewie from Family Guy –’Victory is mine!’”
Friday, 10:04 am: Catherine is in: E-Trade opened up for market orders at 9:30 am, so she got in her 1 share order with a $150 limit.
Schwab’s page now has this notice about when trading will begin: “Subject to Change, NASDAQ expects the initial Public offering of Facebook, inc. will be released on NASDAQ for quotation around 10:45 AM ET and for Trading around 11:00 AM ET.”Friday, 9:35 am: We have a third account in the running again! Webmaster Belinda Black joined in: She’s putting in a one-share order for market open through her Sharebuilder account. More details to come, but we’ll have at least two early orders in place now.
Friday, 9:33 am: Catherine still hasn’t been able to put in an E-Trade order. The site now says: “Market orders will not be accepted prior to trading on the Nasdaq.” Wow. That’s annoying for anyone trying to get in early. Hibah is calling E-Trade’s PR people to ask about the restriction.
Friday, 5/18/2012, 9:31 am: Zuck just rung the opening bell. Off we go!
Thursday, 7:55 pm: Batter #3. Stacy logged on to Schwab to place an FB order. Here’s the story:
“I’ve never done this before, so I’m groping my way through the system. I went to Trade Stocks, and popped the ‘FB’ symbol into the ‘order entry’ field. Action: Buy. Quantity: 1. Order Type: Er?! It wants to know if I want a ‘Market Order’ or ‘Limit.’
Hibah says I should really, really use a ‘limit’ order, which means setting a ceiling on the price I’m willing to pay. But we want to buy Facebook No Matter What, so I tell the site to make a Market Order.
It seems Schwab agrees with Hibah: That’s a terrible idea. I get this error message: ‘Schwab will only accept limit orders on the purchase of an IPO stock on the first day of trading.’ Ok, ok. I pick $200 as my limit.
Last choice: Schwab wants to know about timing. Do I want a ‘Day Only,’ ‘Good Until Canceled,’ ‘Fill or Kill’ or ‘Immediate or Cancel’?
I admit, I had to go do some Googling. Some of those are intuitive, but what does ‘fill or kill’ mean? (Apparently it means ‘fill right this very second or not at all.’ Since Facebook isn’t trading yet, that won’t work.) I picked ‘Good Until Canceled’ — that seemed to mean ‘keep trying until this works.’
The ‘order verification’ screen came up next, giving me a quote price of $38 per share and a bunch of bright red warnings that I should look very carefully at my limit and be sure I for-reals want to trade at that price.
Damn the torpedoes: I click ‘Place Order.’
And get a confirmation screen! Woah — it worked!
The ‘order status’ page confirms it: I have an active ‘limit or better’ order for one share of Facebook at $200, which will stay open until it expires on 5/17/2012. It’s ON.”
Thursday, 7:03 pm: It turns out Facebook won’t start trading at the opening bell tomorrow — it’ll take an extra hour or so. Why? “It’s not a delay or a problem, just a matter of style,” says a Nasdaq source. “We want to have an IPO stand alone at its own special time.”
Thursday, 6:43 pm: Disaster! We’re down one account! Julianne’s Zecco funding vanished — she logged on and found a negative $280 balance on her account. What happened? We’re still not sure. Here’s her write-up of the long customer-service saga.
This investing stuff can be rough sledding for newbies.
Thursday, 6:08 pm: Catherine is our first guinea pig: Can we put in an order for shares yet? She logged on to E-Trade and gave it a try.
Verdict: Nope. Here’s the error message saying that orders for FB “cannot be accepted online at this time.” We’ll try again first thing tomorrow …
Thursday, 4:21 pm: Pricing is in! Facebook’s IPO buyers will get shares at $38. We’re guessing we’ll be paying more than that when we buy at the market open.
Thursday, 1:21 pm: Here’s a sobering stat from our colleague Dave Goldman: “Of the 31 Internet IPOs held since the beginning of 2011, 22 are currently trading below their closing price on the day they went public. More than half — 16 companies — are trading below their offer price.”
Check out his story on tech IPOs’ dismal track record. For extra fun: It’s got quotes from TheGlobe.com founder Stephan Paternot. Stacy, who was a cub reporter during the first dot-com extravaganza, does this PTSD twitchy-flashback thing when the phrase “TheGlobe.com” comes up.
Thursday 5/17/2012, 7:15 am: Today’s the day! Tonight Facebook is expected to set its final IPO price and release shares to those who have placed orders for a piece of its IPO stock allocation.
Want to get in on that deal? You’re too late. Facing heavy demand for Facebook shares, most retail brokerages “closed their books” — meaning they stopped taking customer orders — earlier this week. But even if you’d placed an order early, you probably wouldn’t have been able to get a piece. Here’s what happened when CNNMoney tried to place IPO share orders through Charles Schwab, E-Trade and Zecco.
Wednesday, 2:37 pm: Catherine got hold of an E-Trade rep to quiz him on why E-Trade said no bueno to her attempt to buy IPO shares. Here’s how it went down:
“Wildly disappointed by my rejection, I got on the phone with E-Trade to find out why I wasn’t a stellar candidate to put in a pre-order for Facebook. I mean, I have a good job, decent salary, no debt and a fairly good amount of trading knowledge — so why aren’t I feeling the love?
One long phone call later, I still don’t really have an answer about what in my customer profile the E-Trade gods didn’t like. The people I spoke with didn’t know what it was that disqualified me. That actually does make a bit of sense: The profile questionnaire is multiple choice, so if they were able to tell me what the ideal profile was, I could have skewed my answers to fit the bill. Granted, you’re only allowed to apply once, so I would have needed to ask them ahead of time … but there’s still some logic to it.
While I’m still smarting from the rejection, I’m looking forward to Friday, when Facebook debuts and I can freely buy my one share.”
Hibah also made some calls on this, and learned of an additional hurdle: E-Trade only sells IPO shares in 50-share increments, according to spokesman Brett Goodman. So if someone qualifies to buy Facebook shares, they’ll have to buy at least 50 of them. At $38 each, the top of Facebook’s proposed price range, that’s a $1,900 outlay.
Wednesday 5/16/2012, 2:19 pm: Julianne’s Zecco account says it’s fully funded — her transfer cleared. Whew. She now has the cash to snap up a Facebook share on Friday.Tuesday, 4:35 pm: Like most small-time investors, we’re going to be shut out of Facebook’s actual IPO sale on Thursday night. So, new plan: We’ll buy shares in regular trading Friday morning, when the market opens.
Buying shares in open market trading doesn’t require any special, insider access or an account feathered with six-figure sums. You simply need a basic brokerage account with enough cash in it to cover the cost of your shares and their trading fees. Using our Schwab, E-Trade and Zecco accounts, we’ll each put a market-open “buy” order in on Thursday seeking 1 share of Facebook stock when it becomes available Friday morning.
Tuesday, 1:26 pm: Last stop, Zecco. Julianne went looking for an “IPO center” … and came up empty. She fired up Zecco’s customer service live chat for answers. Here’s the transcript:
Jimson: Thank you for contacting Zecco Trading. How may I assist you today?
You: Hi there. Does Zecco have an IPO center where I can check out upcoming offerings?
Jimson: I would be more than happy to assist you.
Jimson: Unfortunately, we do not have an IPO center as of yet.
You: OK thanks - so there’s no page to try to buy FB at the offering price?
Jimson: Unfortunately, customers are only allowed to buy Facebook from the secondary market at hte market price.
You: thank you. So I can buy only at market price on Friday after the trade opens?
Jimson: You are able to purchase Facebook shares on the day of the IPO on May 18. Simply place an order on May 18 as you would place any other order. Unfortunately, you would not be able to place any orders until the day of.
Brokerages can only sell shares in a company’s IPO if they’re an underwriter of the offering (as E-Trade is for Facebook) or have a deal with the underwriters to snag a piece. Zecco hasn’t struck those deals, so its customers won’t be able to buy shares at Facebook’s IPO price.
Tuesday, 1:12 pm: Having wiped out at Schwab, we turned to E-Trade. Catherine hit the site’s “IPO Center” to check out her buying options.
E-Trade requires customers to submit a “customer profile” before they can trade in an IPO. It asks for information such as your household income, liquid net worth, investable assets, and level of investment experience. Catherine filled that out truthfully — journalists aren’t rich — and promptly got DQ’d.
“Based on the information you provided in your Customer Profile, you are ineligible to participate in this offering,” the site announced.
(We like the bright red and bold on the “you are ineligible.” Nice touch.)
Why wasn’t Catherine eligible to buy? She’s calling E-Trade to find out.
Tuesday 5/15/12, 11 am: Shopping time!
We picked Schwab as our first spot for trying to buy IPO shares. From Stacy:
“I clicked ‘Trade,’ then ‘IPOs,’ and hit this notice:
Facebook, Inc. Offering Window Information
Please be advised the Conditional Offer to Purchase window for the Facebook, Inc. Initial Public Offering will be closing at 3pm ET on Tuesday, May 15th.
Yikes, early deadline — but there are still four hours to go, so I should be fine. The Schwab site shows me the basic details of Facebook’s offering, including the expected pricing date (5/17/12), the number of shares being offered (337.42 million) and the expected price range ($34-$38 per share). Next step: Entering a “conditional offer to purchase.” I click the buttons to “Start COTP.”
And then, strikeout. The site gives me back this message: ‘Based on the account information we have on file, you are not able to participate in this offering.’”
That’s all Schwab offered — no reason why Stacy wasn’t eligible to buy. CNNMoney markets reporter Hibah Yousuf reached out to a Schwab representative for more details.
It turns out that like many brokerages, Schwab has rules about who it will let buy into an IPO. In Schwab’s case, the minimum requirement is that you have $100,000 in your investment account or have made at least 36 trades in the last year. Even that won’t guarantee you access: “It’s more case-by-case for each client, depending on their situation,” company spokesman Michael Cianfrocca said.
Other brokerages have even steeper requirements. Ameritrade, for example, wants to see at least $250,000 in your investment account or a record of 30 trades in the past three months — and it too has some additional, unspecified “eligibility requirements,” according to a company representative.
Ameritrade and Schwab declined to go into more detail, but it would be typical for a brokerage to take a close look at a client’s stated goals and overall financial condition before green-lighting a risky investment like an IPO purchase. If you’ve designated yourself as a conservative investor and have never bought into an IPO before, the company’s reps might want to have a chitchat with you first.
Friday 5/11/12, 5:29 pm: To maximize our opportunities and compare the buying experience, we decided to buy Facebook shares through three different online brokerage accounts.
CNNMoney tech editor Stacy Cowley had an unused Charles Schwab brokerage account linked to her Schwab checking account — perfect for our purposes.
For our third account, we checked out a few online brokerages with low trading fees and picked Zecco. Tech reporter Julianne Pepitone set up a new account — a process that took less than 10 minutes, start to finish. To fund the account, she linked her checking account and transferred over some cash.
That generated this message: “Your initial deposit of $250.00 was submitted. Once processed, you will receive an email confirming the transfer of funds into your Zecco Trading account.” How long will that take? We’ll see …
Friday 5/11/12, 12:22 pm: The first step in buying shares in a company is to open a brokerage account you can use for the transaction. For our “let’s buy Facebook!” experiment, CNNMoney markets editor Catherine Tymkiw opened an E-Trade account. Here’s her description of the process:
“As I sat down at my laptop, I wondered, ‘Is this really something I want to do?’ But what the hell, you only live once.
It’s surprisingly easy to open an account online. That may not be news to most people, but I tend to trust my money with people who I think are much smarter than myself, so I shy away from the do-it-yourself trading. Anyway, within about 10 minutes, I had an account number and an account just waiting for my money. There are four different ways to put money into an E-Trade account, depending how long you’re willing to wait. It can take anywhere from 1 to 8 days.
Since Facebook is going public in a week, I’m under a little time pressure. E-Trade has a free, quick transfer option that takes 3 business days, but you have to first link your checking account with E-Trade, which also takes a couple of days — too late for me if I want to get in on the first day of Facebook trading.
The option I went with was a straight wire transfer. The bank charges $30, but E-Trade doesn’t charge any incoming wire fees. The extra cash was worth the peace of mind to ensure that I’d have my account funded well ahead of the May 17 IPO. The whole process took about 20 minutes, give or take a few.’”
Thursday 5/10/12, 1:15 pm: To buy shares in a newly public company, it helps to know that an IPO happens in two stages. First, the company’s underwriters buy shares directly from the company at the IPO price. They then sell shares at that price to their own clients, which include major players like mutual funds, hedge funds and institutional investors. That typically happens in the evening, and for Facebook, it’s on track to happen Thursday night.
The next day — Friday, May 18 — those who bought IPO shares can turn around and resell them on the open market. That’s when average investors have their best shot at buying shares.
Can retail investors — that’s ordinary people like us — buy in at the IPO price?
Technically yes, but as we found out, it’s not easy. Brokerages only want experienced investors, people with lots of money and lots of trading experience, buying in on IPO deals.
There’s a good reason for that restriction: IPOs are risky investments. There’s a widespread expectation that Facebook shares will rise when they begin publicly trading, but that’s not always the case for IPOs — even much-buzzed-about IPOs of well-known companies. When Farmville maker Zynga went public in December, its shares ended their first day of trading at $9.50, down 5% from the $10 buyers paid for IPO shares.
Analysts say Facebook is an especially dicey bet, because its valuation is already extremely bullish compared to its underlying financial fundamentals. Here’s some recommended reading for those considering investing: “How big does Facebook really have to get?” and “5 reasons to not ‘like’ Facebook’s IPO.”
Still, lots of people want to buy shares of Facebook at its IPO price, so we’re giving it a try. Stay tuned …
Thursday, May 24, 2012
CYBERCLASSROOMTV GLOBAL PROJECT 2012: MIT’s online courses already have a huge global following, now the times for Canadian and world universities to start Open Learning
MIT’s online courses already have a huge global following. In March, for example, some 120,000 people signed up for its circuits and electronics class. According to some observers, we are witnessing the emergence of a new model of postsecondary education that will change the way universities operate. “There’s a tsunami coming,” Stanford University president John Hennessy said recently. Online courses will never replace the crucial elements of a university education. But Canadian universities, which have been lagging in this area, must get into the game and reap the benefits that this new technology offers.
Open courses are a logical extension of every university’s core commitment to preserve and disseminate knowledge as widely as possible. It’s likely that Harvard, MIT, Stanford and the other institutions that are investing heavily in this area also recognize that making their best classes available to anyone with an Internet connection will raise their global profile and burnish their reputation. Because universities worldwide are now competing with each other for talent, these online courses may help them recruit the best students and faculty from Brazil, India, China and beyond.
Canadian universities are engaged in this same global competition, but their open course efforts pale in comparison to what Harvard and MIT are doing. From Queen’s University, one can download recordings of a few individual lectures and special events, including a panel discussion on climate change and a talk about Islam in medieval Europe. The University of Victoria offers podcasts of convocation speeches and short introductions to some of its academic departments. The University of Montreal’s site includes an eclectic mix of talks on subjects ranging from nuclear weapons to language politics. These efforts to make university events available to a wide audience are laudable, but they don’t come close to the dozens of complete lecture courses by top professors that Yale and Berkeley, for example, now offer.
Because Canada’s future increasingly depends on its universities’ ability to compete with their global peers, the stakes are high. Only top-flight universities can produce the well-educated graduates and cutting-edge research that economic innovation requires. They can also attract foreign students who with luck will settle in Canada and help satisfy our growing need for talented immigrants. A national open courses project would be an easy and relatively inexpensive way to demonstrate why students should come to study in Canada. It could be our universities’ calling card to the world.
Domestically, this project could also improve the quality of our public life. Because the vast majority of Canadian universities are publicly funded, they have a mandate to contribute to the public good beyond the education of the students who come to campus and pay tuition each year. Moreover, at a time when we’re increasingly worried about the fracturing of our political and intellectual life along regional lines, open courses in Canadian history, politics, and law could increase our understanding of fundamental issues and yield better-informed public debate.
What might a pan-Canadian open courses project look like? Instead of following the current model in which each university acts independently, the leading institutions from across the country should build a single national open course portal to which they would contribute entire lecture courses in a range of fields. Citizens could watch multiple versions of the same basic courses taught by different professors across the country and see a variety of ways of approaching the same questions. Imagine listening to historians from UBC, the University of Toronto, Laval University and Dalhousie University lecture on the development of Canada from its origins to the present day. Imagine comparing how constitutional law professors in Quebec and Saskatchewan, for instance, interpret the Charter of Rights and Freedoms. Imagine following courses on Canadian literature or politics taught by this country’s best teachers in both official languages.
A national open courses initiative will not singlehandedly transform our universities into global powerhouses. Recorded lectures are no substitute for the on-campus university experience or for investments in advanced research. Computers can’t lead intense small-group discussions, give rigorous feedback on essays or help students think through intellectual puzzles. Canadian universities need to make clear that new technology can’t produce well-educated undergraduates on the cheap, because the most important elements of a university education depend on unchanging principles and strong relationships between professors and students. But despite these limitations, what’s possible in higher education is changing rapidly. Instead of following in the wake of other schools, Canadian universities should join the leading edge of this new experiment and turn this new technology to good use. The rest of the world is already thinking big about the future of higher education. We should too.
Michael Cotey Morgan is Raymond Pryke Chair at Trinity College at the University of Toronto, where he teaches international relations and history
Wednesday, May 23, 2012
EVEREST MOUNTAIN TRAGEDY: "Save me" Canadian climber pleaded
Faced with delays as her team tried to reach the summit of Mount Everest, the Canadian woman who died over the weekend was urged by her sherpas to turn back because she was tiring, but she was determined to pursue her climb, says her Nepalese trekking firm.
Toronto resident Shriya Shah-Klorfine, 33, was one of four climbers who died on the 8,848-metre mountain.
“On that day, there were too many people to go climb the Everest, there were too many traffic jams,” her outfitter, Ganesh Thakuri, managing director of Utmost Adventure Trekking Pvt. Ltd., said by telephone Tuesday after he returned from base camp.
“When it was over 8,500 metres, she loses her stamina and she was very weak … They tried to get her to go back but [she] did not listen. She wanted to go to the summit anyhow. It took a very long time. It was 22 hours to go on top of Everest for her. On the way back down, she lost her energy.”
Having to spend extra time in the “death zone,” a treacherous area of extreme altitude, took a toll on Ms. Shah-Klorfine, said Priya Ahuja, a friend who spoke with the expedition manager after two sherpas who accompanied the Canadian returned to camp.
At some point in her descent, the weather suddenly changed. Strong winds struck the mountainside and Ms. Shah-Klorfine became disconnected from her oxygen supply, Ms. Ahuja was told.
The guides tried to help her. They placed her arms on their shoulders and helped her walk, but she was too weak and she collapsed.
“Save me,” she told them.
They tried to revive her, but it was too late.
Ms. Ahuja said the expedition manager didn’t mention to her that the guides advised Ms. Shah-Klorfine to turn back before she reached the peak.
An American climber, Jon Kedrowski, reported that there was a wait of up to two hours at a chokepoint when high winds shifted and gusts of more than 130 kilometres an hour blasted the trapped, exhausted climbers.
Dr. Kedrowski told Denver TV station KDVR that he and others tried to help disoriented, frostbitten climbers. He saw the four victims as they were freezing to death.
“[One man] was basically hallucinating, he took his hat off, his gloves were thrown away and then he kind of reached out and looked at me … he kind of reached out to me, kind of in a zombie-like fashion,” Dr. Kedrowski said. “At that point, there’s not a lot you can do for somebody that’s dying and frozen to death.”
He said one victim was lying face down in the snow with his or her headlamp still on.
He saw the face of the man who had thrown his hat off but didn’t recognize the others because they were fully clad and wearing oxygen masks.
The other victims were a German doctor, Eberhard Schaaf, 61, South Korean Song Won-bin, 24, and Ha Wenyi, 55, from China.
Ms. Shah-Klorfine had been training for two years, walking and running 19 kilometres a day with 20 kilograms on her back, but she had limited climbing experience.
University of Toronto surgeon John Semple, who was team doctor of a 2005 Everest expedition and has studied patterns of mortality on the peak, said delays caused by the crowding on Everest exposes climbers to extreme cold and depletes their oxygen supply.
This compounds other high-altitude problems, such as brain swelling that triggers cognitive impairment and loss of co-ordination.
“Even with oxygen, it’s a tough climb. It takes a lot more than just stamina,” he said.
Ms. Ahuja believes there should be tighter controls on the number of people climbing Everest at the same time to alleviate traffic jams. “We already lost our dear friend and I don’t want this to happen to anyone else,” she said.
Another friend and mentor, Bikram Lamba, said the family has appealed to Foreign Affairs in Ottawa to help them retrieve her body. They had asked the company but, according to Dr. Lamba, the firm said the task is too dangerous and not its responsibility.
The agreement Ms. Shah-Klorfine signed with Utmost Adventure Trekking gave the expedition team the authority to call off the climb if she wasn’t well, Dr. Lamba said.
“I don’t know what the reality is,” he said. “If they decided she wasn’t fit to go, why did you permit the sherpas to accompany her?”
Delays in getting to the summit, worsening weather and limited oxygen-tank supplies are all good reasons to turn around but it is not a decision that is easy to make for climbers for whom Everest is “the trip of a lifetime,” said Dr. Semple.
“At that altitude, you can’t pull somebody off. All you can do is recommend to them.”
Nepalese officials told The Associated Press a similar rush up the world’s tallest peak will begin again soon, with about 200 climbers expected to attempt to scale Everest between Friday and Sunday.
“The climbers have received the permits to climb within specific dates. We cannot say who gets to get to the summit on which dates because of the unpredictable weather. When weather clears up, they all want to benefit,” said Tourism Ministry spokesman Bal Krishna Ghimire.
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EVEREST ‘DEATH ZONE’ IS SYMPTOMLESS KILLER
Above 8,000 metres in Mount Everest’s “death zone,” a swelling of the brain caused by the thinning air can hit with few preceding symptoms such as nausea or headache.
That cerebral edema, which causes cognitive impairment and loss of co-ordination, is compounded by fatigue and cold. It is the reason climbers die during descent from Everest, according to a 2008 study in the British Medical Journal.
One of the study’s co-authors, University of Toronto surgeon John Semple, was team doctor of a 2005 Everest expedition.
He said the health threat is made even worse by the traffic jams on the mountain, particularly at the Hillary Step, a 12-metre spur that’s the last major obstacle before the peak.
“There are so many people now on the top of Everest and the window of opportunity is quite narrow in terms of weather. So there are huge delays and people stand around … It takes a lot longer, they run out of oxygen on the way down. Once you stop climbing, you get very cold very quickly,” Dr. Semple said in an interview.
The study found that foreign climbers died at more than six times the rate of sherpas during the descent from the summit.
Sherpas are accustomed to the thin air. When they do die on the mountain, it’s usually at lower levels from avalanches or falls, Dr. Semple said. Foreign climbers are more likely to succumb at higher altitude.
WORLD NEWS 2012: Pakistani doctor accused of helping U.S. gets 33 years in prison
Wed May 23, 2012
Islamabad, Pakistan -- A Pakistani doctor accused of helping the CIA track down Osama bin Laden was sentenced Wednesday to 33 years in prison for treason, officials told CNN.
Panetta: Doctor should be released
Analyzing bin Laden's secret letters
Bin Laden's plan to kill Obama
Man who helped find OBL lands jail time
STORY HIGHLIGHTS
- NEW: U.S. senators reject treason claim, call sentence "shocking and outrageous"
- Hillary Clinton intervened on Shakeel Afridi's behalf, an official says
- Afridi was accused of helping collect DNA from Osama bin Laden's compound
- He was sentenced by a tribal court; a legal analyst calls the sentence a sham
Shakeel Afridi was also fined $3,500 for spying for the United States, said Nasir Khan, a Khyber Agency official, and Fazal Mehmood, an official from the tribal court that handed down the sentence.
The court heard the case against Afridi for two months. The doctor was not afforded a chance to defend himself, which is in accordance with the laws of the tribal justice system, the two officials said.
Afridi was present at the sentencing and was sent to the central jail in nearby Peshawar.
Afridi helped the CIA use a vaccination campaign in an attempt to collect DNA samples from residents of bin Laden's compound in the city of Abbottabad to verify the al Qaeda leader's presence there.
Panetta: Doctor should be released Analyzing bin Laden's secret letters Bin Laden's plan to kill Obama
At least one legal analyst said Afridi's sentence was a sham.
Islamabad-based lawyer Shahzad Akbar said the punishment was handed down by a tribal court in Khyber even though the alleged offense occurred in Abbottabad, which raises questions about the legitimacy of the proceedings.
"This judgment won't last," Akbar told CNN. "If this punishment is challenged by Dr. Afridi's family in the Superior Court of Pakistan, there is a good possibility that the sentence will be turned around."
Human rights groups have often accused tribal courts of violating the fair trial process guaranteed under Pakistan's constitution.
Akbar said the Afridi ruling could be a move by the government to save face without making a spectacle out of a sensitive situation.
In a federal court, the government would have had to produce evidence, and Afridi would have the right to defend himself.
"There is ample case law that says this process is cheating against the laws and constitution of Pakistan," Akbar said.
Afridi can appeal the sentence, said Tariq Hayat Khan, a senior official in the tribal region.
U.S. Secretary of State Hillary Clinton intervened on behalf of Afridi when he was first arrested, a senior U.S. official told CNN. Clinton argued that Afridi should be released and "will keep doing so," the official said.
U.S. Defense Secretary Leon Panetta has acknowledged Afridi's role in bin Laden's discovery, saying he was extremely helpful in the operation against the al Qaeda leader.
A statement from U.S. Sens. John McCain, R-Arizona, and Carl Levin, D-Michigan, who both sit on the Armed Services Committee, also said that Afridi's actions were far from treason and that the sentence was "shocking and outrageous."
"Dr. Afridi set an example that we wish others in Pakistan had followed long ago," the lawmakers said, "He should be praised and rewarded for his actions, not punished and slandered."
Afridi was charged under the Frontier Crimes Regulation, British-era laws that govern Pakistan's semi-autonomous tribal region and do not carry the death penalty.
In October, a Pakistani commission recommended treason charges be filed against Afridi. A federal investigation is ongoing, according to a government official close to the investigation who is not authorized to speak to the media.
The official was not clear on how Wednesday's sentencing would affect the federal case.
MONEY AND IT BUSINESS: The Facebook IPO - Investors sue Facebook, Morgan Stanley
"It appears as though material information was not disclosed," said Robert Weiser, one of the plaintiff lawyers in the class action suit. "We believe that the offering was conducted unfairly and it harmed public stockholders."
According to a report published by Reuters, Morgan Stanley (MS, Fortune 500) shared a negative assessment of the social network with major clients ahead of Facebook's (FB) IPO, which debuted last week.
The lawsuit states that "certain of the underwriter defendants" were given estimates for how Facebook would perform in the second quarter and for the full year. The "revisions were material information which was not shared with all Facebook investors, but rather, was selectively disclosed by defendants to certain preferred investors and omitted from the registration statement and/or prospectus," the plaintiffs claim.
A spokesman for Morgan Stanley declined to comment.
"We believe the lawsuit is without merit and will defend ourselves vigorously," said a Facebook spokesperson to CNN.
Other underwriters targeted by the lawsuit include Barclays Capital, Goldman Sachs (GS, Fortune 500), JPMorgan Chase (JPM, Fortune 500) and Merrill Lynch, a unit of Bank of America (BAC, Fortune 500).
Spokespersons for Goldman Sachs and Barclays Capital declined to comment. Spokespersons for the other firms were not immediately available.Weiser said that more plaintiffs may join the class action lawsuit. He said that monetary damages have yet to be specified.
Anthony Sabino, professor at the Peter J. Tobin College of Business at St. John's University, said that it's hard to tell whether the suit has merit, because it's based on a single Reuters report.
"It's still somewhat risky to peg an entire class action lawsuit upon a single news report," he said.
But Sabino said that it could pay off, from a plaintiff's standpoint, "to be the first guy in" to start digging for information, in the hopes that concrete evidence of wrongdoing will emerge.
On Wednesday, Congress got into the act. Senate Banking Committee started looking into Facebook's IPO. The Financial Industry Regulatory Authority and the state of Massachusetts are also scrutinizing the way the IPO was handled.
Facebook's stock price finally rose Wednesday for the first time since its Nasdaq launch on Friday.
Facebook was one of the most anticipated -- but also disappointing -- IPOs in recent history. On Friday, the first full trading day, the stock closed at $38.23 per share, just a hair above its IPO price of $38
CYBERCLASSROOM TV GLOBAL PROJECT: OCW publishes two new OCW Scholar courses
OCW has released two new courses in the innovative OCW Scholar format designed for independent learners.
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15.599 Workshop in IT: Collaborative Innovation Networks
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12.010 Computational Methods of Scientific Programming
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Do you understand the philosophy behind leadership, the importance of teamwork, and how and why it's important to self-reflect?
If you aren't sure (or even if you are), then take a look at the Leadership Training Institute course.
It's more than lecture notes. The instructors encourage you to scream, run, think, reflect and learn in your own way.
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Courses in Context: The Business of IPOs
Photo of NASDAQ sign in New York City by broc7.
Facebook's initial public offering (IPO) began at $38.23 a share on May 18. It's now riding the waves of the stock market.
In the following courses, there are resources that look at the philosophy and mechanics behind IPOs.
15.975 Special Seminar in Management The Nuts and Bolts of Business Plans - see Study Materials. "What Are the Terms? - Part 3: Run Don't Walk To The Exit", "Steer Clear of the Tempest: A Start-Up Tragedy in Three Acts", and "WHIPLASH - (The Pitfalls of Acceleration)"
15.431 Entrepreneurial Finance - see Lecture Notes. Initial public offering (IPO)
15.402 Finance Theory II - see Lecture Notes, Section B. Lecture: Capital Structure: Informational and Dynamic Considerations
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Tuesday, May 22, 2012
ARTE LATINOAMERICANO: Obra de chileno Roberto Matta es subastada en US$ 5 millones
La revolución de los contrarios, del surrealista chileno, se vendió en Christie's, en Nueva York, y logró el cuarto nivel histórico de arte latino.
22/05/2012 - 19:28
La revolución de los contrarios, de Roberto Matta. El cuadro, pintado en París por Matta (1911-2002), constituye "un exponente del momento cúlmine de la carrera del artista, y en ella representa el cataclismo de un espacio en perpetuo estado de cambio, mediante regueros de pigmentos, líneas onduladas y estallidos de color", afirmó a Agencia Efe el director de la venta, Virgilio Garza.
La subasta de hoy en Nueva York, comprende obras de arte desde la época de la Colonia hasta nuestros días. Entre las obras destacadas en la subasta -aparte de Matta-, figuran Grafismo universal sobre fondo gris (1937), del uruguayo Joaquín Torres-García, y Navio negreiro (1950), un trabajo del modernista brasileño Candido Portinari.
Con esta cifra en la subasta de Christie's, la obra de Roberto Matta La revolución de los contrarios alcanza el cuarto nivel histórico en ventas de arte latinoamericano, superado por Trovador (1945), del mexicano Rufino Tamayo, vendido en U$7.209.000 millones en una subasta de Christie’s en mayo de 2008, América (1955), del mexicano Rufino Tamayo, que se transó por U$6.802.500 millones por Sotheby's en noviembre de 2008, y Raíces, (1943), de la mexicana Frida Kahlo, vendido en U$5.616.000 millones en un remate de Sotheby's en mayo de 2006. Estos datos han sido publicados por el sitio arteyartistas.org, y actualizados a agosto de 2011.
Durante la venta, hasta U$1,4 millones se pagaron por Grafismo universal sobre fondo gris, de Torres-García. El mismo precio de U$1,4 millones alcanzó la obra La calle, del colombiano Fernando Botero, un artista con una amplia representación en la subasta y uno de los "más exitosos que todavía viven", según Garza.
La obra Salterio, del hiperrealista chileno Claudio Bravo alcanzó un precio de 1,1 millones de dólares.
Esta pintura forma parte de una serie de cuadros realizados entre 1997 y 2002, cuyos títulos remiten al cristianismo, y en los que Bravo recrea primorosamente diferentes tejidos, a través de colores densos y luminosos llenos de sensualidad.
Por otro lado, la obra del argentino Emilio Pettoruti, Concierto, un bodegón con claras reminiscencias cubistas, se vendió por 794.500 dólares. Otros pintores chilenos de gran precio son Jose Balmes y Gracia Barrios, esta obtuvo el Premio Nacional de Arte 2011 y se encuentra entre los 100 mejores artistas - pintores - del siglo XX.
Monday, May 21, 2012
Friday, May 18, 2012
Wednesday, May 16, 2012
Friday, May 4, 2012
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