China unveils ambitious space projects, to probe black holes, search for aliens...

BEIJING, Aug. 21 (Xinhua) -- China will launch several space projects, including a hard X-ray telescope for black hole studies, between 2014 and 2016, according to a senior Chinese astronomer.

Su Dingqiang, an academic at the Chinese Academy of Sciences and former president of the Chinese Astronomical Society, revealed some details regarding the hard x-ray modulation telescope (HXMT), China's first space telescope, on Tuesday at the opening ceremony of the International Astronomical Union (IAU)'s 28th General Assembly.

The hard X-ray band is a key waveband for high-energy astrophysics studies. Hard X-rays originate mostly from regions close to black holes and have high penetrative power, making them important tools for studying physical processes in extreme conditions, such as high matter density and high energy density.

Su said China will develop another satellite, the dark matter particle explorer (DAMPE), to help detect high-energy electrons and gamma rays, as well as a telescope to study the solar magnetic field and a Sino-French joint mission to study gamma ray bursts.

Su said Chinese scientists are also planning to establish an Antarctic astronomical observatory.

Cui Xiangqun, an academic at the Chinese Academy of Sciences and president of the Chinese Astronomical Society, said a lot of work has been done to gain experience for the future construction of an observatory in the Antarctic.

An Antarctic Survey Telescope (AST) was installed there at the beginning of the year and another AST will be installed in 2013, said Cui. China's first Antarctic telescope was installed in 2009.

"We can only send scientists there once a year and each time they can stay no more than three weeks. These telescopes help us detect problems via remote control," Cui said.

"Some of the technological problems we face there are similar to those in space, like low temperatures," Cui said.

However, Cui was optimistic about the Antarctic facility. "It has drier air, better visibility and fewer background disturbances. Its turbulent boundary layer is closer to the ground compared to other sites on the ice slope," she said while describing the area near the telescope.

Chinese space exploration has developed rapidly in the past decade. Some large-scale astronomical projects in China, including the Large Sky Multi-Object Fiber Spectroscopic Telescope (LAMOST) completed in 2008 and the Five-hundred-meter Aperture Spherical Radio Telescope (FAST) to be completed in 2016, have drawn global attention.

The ongoing conference, the first of its size to be held in China, is itself a historic occasion for the country.

"China's technology has advanced markedly, and some of its buildings are really world-class. The fact that we are meeting here is an indication that China has emerged in a short period of time to be competitive on the world stage in the science of astronomy," said Robert Williams, IAU president.

By Xinhua writers 
Quan Xiaoshu, Yu Fei, Li Huizi and Ji Shaoting

 

China to probe black holes, search for aliens

Look out space, the Chinese are coming...

By Phil Muncaster 

Posted in Science, 23rd August 2012  Newscribe : get free news in real time

China will ramp up its space exploration plans from 2014, with shiny new kit to probe black holes, study dark matter and search for signs of alien life, according to one of the country’s top astro-boffins.

Su Dingqiang, former president of the Chinese Astronomical Society and member of the Chinese Academy of Sciences, revealed the plans to local media at the opening ceremony of the International Astronomical Union (IAU)'s 28th General Assembly on Tuesday.

He said that a hard x-ray modulation telescope (HXMT), currently under construction, will be sent into orbit around the Earth between 2014 and 2016 using a Ziyuan II satellite, according to Xinhua.
The HXMT project web site has the following on the telescope:

Hard X-ray band is a key waveband for high energy astrophysics study. Exploring various kinds of black holes is a major frontier of physics and astronomy in the new century. Hard X-rays originate mostly from regions closest to black holes and are highly penetrative, and are therefore important tools for studying the physical processes in the extreme conditions such as high matter density, high energy density, high electric-magnetic field, and high gravitational field.

Also planned is a dark matter particle explorer (DAMPE), expected to be launched by 2015, as well as a telescope to study the solar magnetic field and a joint project with France to study gamma ray bursts, the report said.

Always striving to be the biggest and best on Earth, China is also set to complete the world’s largest radio telescope in 2016.

The 500-metre aperture single dish giant is being built in in Guizhou province, southern China, at a cost of over 700 million yuan (£69.3m).

It’s designed to be three times more sensitive than the current world record holder, meaning that it should be able to see further into space than ever before.

For the record, it will supplant the Arecibo Observatory in Puerto Rico – known to Bond fans as the setting for the climax of Brosnan flick Goldeneye – as the world’s largest and most sensitive single aperture telescope. ®

Why Malaysian Evidence Act Section 114A should be repealed

Continued opposition to this piece of legislation may yet result in it being taken off the statute books.

THE recent amendment to the Evidence Act with the insertion of Section 114(A) basically presumes that a person who is depicted in a publication as owner or administrator is presumed to have published the contents.

This effectively means that those named in publications are presumed guilty of any offending content that may be posted, including those on the Internet where there is no licensing and it is easy to use some other person’s name, photograph and details as the originator.

This presumption of guilt, requiring the accused to prove his innocence, instead of the prosecution having to prove his guilt, is a strange reversal of the rule of law when the entire justice system is based on the assumption of innocence unless guilt is proven.

It is stranger still coming in the wake of moves to liberalise draconian laws such as the Internal Security Act which provided for detention without trial, and the Universities and University Colleges Act which severely curtailed the rights of students to participate in the political process.

When there is such liberalisation taking place, it is strange that the Government should be setting the clock back by introducing legislation that goes clearly against the grain of justice.

Yes, the Internet space is a raucous one and lots of stuff are pasted and posted, and people, including many in the Government, the Cabinet and the Opposition, are regularly blasted for things that they may or may not have done.

But there are laws to deal with them such as the defamation laws. And some of the victims have sought recourse to these with visible success, which includes Information, Communications and Culture Minister Datuk Seri Dr Rais Yatim.

Why, therefore, should a sledgehammer be given to prosecutors to bring a tonne of weight down indiscriminately on people who may not have committed the offence, but may have a tough time proving that they had not and may become involved in tangled knots with the law for a long time?

Conspiracy theorists, of whom a lot exist in this country due to the nature of the way things are, have immediately seen this as a move to limit criticism. That’s hardly a PR effort by the Government.

When the Centre for Independent Journalism organised an Internet blackout on Aug 14, it met with a tremendous response and many people just did not post anything on the Net during that particular day.

Such support must have had an effect on the decision of the Prime Minister to call upon the Cabinet to review its decision to pass the amendment to the relevant Act.

“Whatever we do we must put the people first,” the PM had tweeted, and who can disagree with that?

But unfortunately, the Cabinet stuck to its guns and backed its previous decision.

Dr Rais said the Cabinet discussed it exhaustively and decided not to make any changes because Parliament was represented by the ruling party and the Opposition and had debated it.

“Once it is officially passed, to do something now is an afterthought,” he said.

Dr Rais added that the Law Minister would explain further.

Later, Home Minister Datuk Seri Hishammuddin Hussein said the controversial amendment would be explained further by the Attorney-General.

“If explained properly, I believe right-thinking people will know why the amendment was tabled in Parliament and approved. If there still are fears, laws can also be tweaked, amended and abolished, but don’t get emotional about it,” he said.

Those interested will wait for the Government explanation, although Dr Rais had already said that presumption of fact was nothing new in law and there was still room for accused persons to defend themselves.

The converse position is that such a law can be abused.

Those who want to “fix” someone on the Net can post comments and claim that it came from that particular person. And that person will be tied up in knots trying to defend himself.

That is the main fear among Internet users and other publishers.

Inordinate power is in the hands of prosecutors who now don’t have to prove who the real publishers are.

The question is why grant them these additional powers under the amendment when the entire Internet is subject to the laws of the country?

The only difference is that there is no licensing of the Internet compared to conventional media such as print and broadcasting.

Thus, the new laws are seen as a move to bring the Internet under control more quickly than using existing laws, a move which the disinterested would oppose.

Policymakers may actually realise that. As seen by the quote from the Home Minister above, if there is continued strong opposition to the amendment, it could be repealed.

Perhaps it may need another tweet from the Prime Minister to make that happen, and this time he will be at that Cabinet meeting.

That should make a difference to what the Cabinet may think.

Question Time By P. Gunasegaram

> Like most people, P Gunasegaram can’t stand presumptuous people.

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Malaysian education is too Western-centric, ignorance of Asian values, etc!

A Merdeka of the mind

Our education is too Western-centric, aping Western universities and showing ignorance of Asian and African contributions to knowledge.

AS we celebrate 55 years of political independence, we may note the blessings of peace and prosperity in our beloved land. But we also need to reflect on some unfulfilled dimensions of independence.

If independence is autonomy or freedom from the control of another nation, then we Malaysians are hardly free.

The basic assumptions of our political, economic and educational systems are dictated by Western, especially Anglo-American, hegemony. Politically we are free but enslavement of the mind has hardly ceased.

A slave mentality or Western/Euro-centrism need not be a conscious option. It is rooted in our psychology of dependence on, and blind reverence for, everything Western.

Syed Hussein Alatas calls it “the captive mind”. For Ward Churchill, modern intellectual discourse and higher education are “White Studies”.

Hundreds of years ago, the coloniser seized not only land but minds, monopolising information sources and undermining indigenous know­ledge.

For Frantz Fanon, the colonised was “elevated above his jungle status in proportion to his adoption of the mother country’s cultural standards”.

Ngugi wa Thiong says “it is the final triumph of a system of domination, when the dominated start singing its virtues”.

So 55 years after independence, our public figures are still enamoured with the colonial tune. Their intellectual discourses have three tendencies.

First, the Western worldview and its assumptions are blindly aped. Second, we are ignorant of Asian and African roots of knowledge and Eastern contributions to civilisation. Third, there is hardly any critique of Western theories in the light of our own realities.

Take Western-centrism in our educational institutions. Yusef Progler finds that in whatever field of study, a course in most Asian and African universities follows a similar path.

“It will first identify the great white European or American men of each discipline and then drill their theories and practices as if these were universal”, while ignoring knowledge from other civilisations.

Government recognition of foreign degrees is skewed in favour of Anglo-American awards. Eminent citadels of learning in Asia and Africa are largely ignored.

The favoured destination for JPA-sponsored postgraduate scholars is Europe or the United States. The external examiners and visiting professors are mostly from Britain, the US or Australia. Asian scholars are generally excluded from such honours or offered lesser terms.

Intellectual grovelling before Western experts remains as deeply ingrained as during the British Raj. A few years ago, Cherie Blair was invited to lead the arguments in a case before our courts even when scores of eminent local lawyers were available.

In any prestigious lecture series, the guest of honour is invariably a Westerner, sometimes of dubious credentials. For example, Tony Blair was invited by a local NGO to deliver a lecture.

But when Mugabe and Bashar were scheduled to come, concern was expressed, and rightly so. The crimes of Western leaders may be ignored, but we jump up to take a principled stand against Asian and African miscreants.

Our legal system remains British-oriented. In the English fashion of Austinian positivism, the concept of law is tied to the commands of the political sovereign even though most Asians and Africans regard religion and custom as part of the seamless web of the law.

The Civil Law Act continues its worship of outdated British precedents even though we have greater affinity with many other constitutional systems like India’s.

The Legal Profession Act continues to permit British graduates to be called to the Malaysian Bar without undergoing a bridging course. A key component of the course should be a study of the Malaysian Consti­tution.

In our law faculties, legal education is as much a colonial construct as during the Raj. The course structure and content, the book list and the icons are mostly Western.

A typical course on jurisprudence in Malaysia often begins with Plato, Aristotle, Locke, Bentham, Pound, Weber, Ehrlich, Durkheim, Marx, etc.

The Mahabharata, the Arthashastra, the Book of Mencius, the Analects of Confucius and the treatises of Ghazali, Ibn Rushd, Jose Rizal, Benoy Kumar Sarkar, Yanagita Kunio and Naquib al-Attas are not included.

Chinese, Indian and Persian universities predated European ones and provided paradigms for early Western education. Yet our universities ignore centuries of enlightenment in China, India, Japan, Persia and West Asia.

It is as if all things good and wholesome originated with Western civilisation and the East was, and is, an intellectual desert. The truth is other­wise.

In science, Galileo, Newton and Einstein illuminated the firmament but not much is known about Al-hazen and Nasir al-Din al-Tusi. Western chemistry was preceded by Eastern alchemy, algebra had African roots.

The philosophy of Plato, Aristotle, Kant, Sartre and Goethe can be matched by Ghazali, Ibn Rushd, Mulla Sadra, Shenhui, al-Mutanabbi and Kalidasa. Durkheim’s and Weber’s sociology must compete with Ibn Khaldun’s.

Freudian psychology had its corrective in Buddhist wisdom. The Cartesian medical model has its Eastern counterpart in ayurvedic, unani and herbal methods.

Very few know that Arab Muslims were central to the making of medieval Europe.

A slavish mimicking of Western norms of government, law and economics prevents us from tackling our own problems like poverty and unsustainable development.

Our attitude leaves us vulnerable to many predatory policies of Western-dominated institutions and processes. Transnational corporations dominate our economies.

Many Asian and African nations choke under the debt stranglehold. The West can bring down our economies with currency speculation, hedge funds, piracy of indigenous resources and trade boycotts as new forms of tyranny.

Yet we are too scared or ashamed to express our own views. Basing our life on other nations’ opinions is slavery.

As Aug 31 approaches, we must resolve to free our minds from Western intellectual hegemony. A Merdeka of the mind will put us on the path to that.

Comment
Prof Shad Saleem Faruqi
> The author wishes all readers Salam Lebaran and Salam Kemerdekaan.

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Riding the hi-tech waves

Penangite to return home soon as R&D director after 37 years abroad

GEORGE TOWN: A small electric fan and transistor radio were the only ‘luxury items’ his family possessed, but today, US-based Yong Kit Chin is a high-tech success story.

The 56-year-old National Instruments (NI) R&D director recalled that back then, his father owned a small shoe store in George Town.

The business was barely enough to feed the family and pay the workers’ wages.

“On occasions, when my father couldn’t sell a single pair of shoes and he had very little cash for groceries, we’d have only vegetarian meals,” he said.

Yong said the family didn’t own a car or a telephone and they had their first refrigerator and television set when he was 17.

“Hence, my siblings and I were brought up to be thrifty and we vowed to work hard to improve our lot.

“We couldn’t afford tuition classes, so we learned to be independent and to work harder than other kids,” he said.

When he was about 10, Yong became very interested in technology.

“Later, I became fascinated by electricity and would dismantle and re-assemble the rice cooker, electric iron and radio,” he said in an e-mail interview.

He remembered being “so thrilled” when his uncle gave him a RM5 reward for repairing a transistor radio’s corroded battery terminal.

The former Chung Ling High School boy did well in his school exams and was among the state’s top MCE achievers invited by then Chief Minister, Tun Dr Lim Chong Eu, to a tea reception at his official residence to celebrate the achievement.

He left the country in the mid-70s after securing a scholarship from Columbia University in New York and has been living overseas for 37 years.

“It was a totally new experience as I moved from the lovely and peaceful Penang island to the hustle and bustle of Manhattan,” he said.

Upon graduating with Master and Bachelor degrees in Electrical Engineering, he worked as a Hewlett-Packard production engineer in Singapore.

After over three decades of technical, business and managerial experience in the high-tech industries abroad, Yong is coming home.

He joined NI, a pioneer in modular and software-based instrumentation in Austin, last year.

Yong will return to his home state by the end of September as R&D director at NI’s facility here.

“I am very excited as I finally have the opportunity to work and live in Penang since I left for studies in the United States.

“I am willing to be a mentor to young engineers in Malaysia and share my experiences with them,” he added.

Yong said the thing he missed most about Malaysia was Penang’s delicious hawker food.

“The experience of savouring a plate of freshly prepared ‘char koay teow’ and sipping a cup of ‘teh tarik’ while chatting with friends is just priceless,” he added.

By CHRISTINA CHIN sgchris@thestar.com.my  

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Buy Malaysian shares, sell Facebook stocks?

Malaysia ranked in top spot by Morgan Stanley analysts for third quarter investment

PETALING JAYA: The local bourse may see renewed interest among investors as robust domestic demand and government spending on infrastructure drive earnings among companies.

Morgan Stanley Research analysts said in a recent report that the country was ranked at the top spot for the third quarter based on valuation, profitability, earnings and performance.

“Malaysia's attractive ranking is driven by a combination of attractive dividend yields, under ownership levels, improvement profitability and relatively strong performance momentum,” they said.

They added that the country's current dividend yield of 3% was higher than its three-year average. They said that according to EPFR Global, a funds flow and asset allocation data provider, investors continue to position the Malaysian stock market 210 basis points underweight compared to the MSCI Asia ex-Japan benchmark.

They said profitability in terms of return-on-equity basis has improved to 12.7%, higher than the three-year average. “One quarter relative price performance for MSCI Malaysia has also been strong as it was the second best performing market in Asean,” they said.

While MSCI South-East Asia consensus earnings growth estimates had been revised down by 23 basis points last week, MSCI Malaysia earnings were revised up by 54 basis points.

“MSCI Thailand estimates was revised down the most, by 41 basis points, followed by MSCI Singapore 40 basis points, MSCI Indonesia 10 basis points and MSCI Philippines 4 basis points,” they said.

They said consensus growth estimates for 2012 were 14.4% for Malaysia, Indonesia (9.3%), Philippines (8%), Singapore (3.1%) and Thailand (14.2%).

On a year-to-date basis and relative to the performance of MSCI Asia ex-Japan, MSCI Malaysia declined 1.5%, MSCI Indonesia contracted 7.2%, MSCI Thailand gained 9.2%, MSCI Singapore rose 12.4% and MSCI Philippines jumped 14.7%.

On a sectoral basis, Malaysian utilities was revised up 94 basis points while industrials was revised down 35 basis points.

Meanwhile, The Institute of Chartered Accountants in England and Wales said in a report that although growth prospects for Asean had fallen substantially in line with the deteriorating conditions around the world, “Malaysia is still going fairly strong as domestic demand remains relatively buoyant.”

It said that like other countries such as Indonesia and the Philippines, the basic story of rising middle class incomes in Malaysia persisted despite diminished prospects for investments due to lower profits for exporters.

It forecasts growth to slow down to an annual average of 3.8% in the second half (after growing 5.1% in the first half) due to external headwinds.

“Elections this year or next year bear some political risk, but in the event of a peaceful outcome, growth should rise by 3.5% in 2013. A recovery of its trading partners should see the country's gross domestic product rise by 4% in 2014,” it added.

By FINTAN NG  fintan@thestar.com.my

Is Facebook director signalling to others to rush out of Facebook stocks?

19.16  -0.85 / -4.26%

SAN FRANCISCO: Peter Thiel was the first investor to take a gamble on Facebook Inc. Now some people are wondering whether, in selling most of his stake, the Facebook board member is signaling to others that it's time to rush for the exits.

Thiel, the co-founder of PayPal who invested in Facebook in 2004, sold roughly $400 million worth of Facebook shares last week as the first restrictions barring insider selling were lifted.

The sales, which were conducted as part of a stock sale plan that Thiel entered into in May, have dealt another blow to Facebook's reputation among some investors in the wake of a rocky debut that has wiped out roughly 50 percent of its market value. And it has raised questions about whether Thiel's move conflicts with his responsibilities as a Facebook director.

"It's a vote of no-confidence from a board member," said Max Wolff, an analyst at Greencrest Capital.

"If he wants to serve primarily as a self-interested investor, that's fine. But then you can't be the on the board. Boards of directors are not made up of people whose primary interests are in their checkbook," said Wolff, who said he believed Thiel should resign from the board.

A spokesman for Thiel declined to comment.

"From a shareholder standpoint, if a VC is going to be on the board you'd like to think that they still have a large position in the company and that they're interested in making it be more valuable," said Walter Price, a portfolio manager at RCM Capital Management which does not own Facebook shares. "It sends a mixed message when they sell most of their stock and they still stay on the board," he said.

The 44-year-old Thiel still owns roughly 5.6 million shares of Facebook, worth around $107 million at Tuesday's closing price of $19.14 per share.

That stake means he still has "skin in the game," said James Post, a professor of management at Boston University who specializes in corporate governance issues.

"The worst you can say is that it may reflect perhaps a questionable judgment about getting rid of all these shares at a time when such big questions are looming about Facebook's future," said Post. But he said he believed that Thiel's sales do not disqualify him from serving on the board.

The stock sales are the latest in a seemingly endless string of setbacks and controversies to plague Facebook since its highly anticipated IPO in May.

The world's No. 1 online social networking website, with roughly 955 million users, experienced brisk demand for its shares when it was a private company and became the only U.S. company to debut with a market value of more than $100 billion.

But technical glitches with the Nasdaq stock exchange marred the stock's first day of trading and concerns about the company's slowing revenue growth have pressured the company's shares since then.

Thiel, who has an undergraduate degree from Stanford University in philosophy and a law degree from Stanford Law School, was among Facebook's first believers.

He invested $500,000 in Facebook at a $5 million valuation in September 2004, seven months after the company was created by Mark Zuckerberg in a Harvard dorm room. In 2006, one of Thiel's investment firms, the Founders Fund, participated in a $27.5 million funding round along with Greylock Partners, Meritech Capital Partners and Accel Partners.

The Facebook investment is by far the most successful of Thiel's investments, which have also included stakes in LinkedIn Corp , Yelp Inc and SpaceX.

Thiel sold 16.8 million shares of Facebook at the IPO for $38 a share, for total proceeds of roughly $640 million. And he sold a significant number of shares through a private transaction in 2009.

Facebook, which declined to comment on Thiel's stock sales, said in its prospectus in May that the company believes Thiel should serve on the board because of his "extensive experience as an entrepreneur and venture capitalist, and as one of our early investors."

It's common for early investors, such as venture capitalists and angel investors, to have seats on the boards of companies they've backed. And venture firms typically distribute shares of the company to their limited partners following an IPO, so that the venture fund's investors can get a return on the investment.

But there are no "hard and fast rules" for when those investors should exit the board after a company's IPO, said Nick Sturiale, a partner at venture capital firm Jafco Ventures.

"It's usually a discussion between the CEO and the board member and the partnership whether they stay, and for how long," he said.

John Doerr, a partner at venture capital firm Kleiner Perkins Caufield & Byers, is on the board of Google Inc and was on the board of Amazon.com Inc until 2010 - both companies that Kleiner funded.

If the fund that a director represents sells its stake after the IPO, the director should also consider stepping down, said Charles Elson, a University of Delaware finance professor specializing in corporate governance.

The topic sparked a lively debate on Tuesday, as venture capitalists and technology company executives unleashed a rash of Twitter messages and blog posts to defend or criticize the insider sales.

Fred Wilson, a principal with Union Square Ventures, noted in a post on his personal blog that insider selling is to be expected following an IPO.

"Those who took the risk of losing all the capital they bet on 20 year old Mark Zuckerberg are entitled to their return," wrote Wilson.

Earlier report from print edition

WASHINGTON: If you bought Facebook shares in the May initial public offering (IPO) and held onto them, by Monday you would have lost more than half your investment and not see any encouraging signs of making your money back.

Three months after the largest tech share issue ever on US markets, Facebook fell to a new low below US$19 (RM60) a share, compared to the US$38 (RM120) underwriters charged for the 421 million shares they sold.

Although the stock bounced back to close at US$20.01, IPO investors were still holding huge losses with not much hope of a quick reversal, analysts said,.

Some key investors were still cashing out on Thursday and Friday, billionaire Peter Thiel, who invested in Facebook first in 2004, sold off nearly 80% of his huge holding, according to a filing with the Securities and Exchange Commission on Monday.

Thiel's average price for 20.6 million shares was US$19.73 still a handsome profit for such an early backer of the website, but not a demonstration of confidence in the company's potential to rebound.

Facebook raised US$16bil when it went public on May 18, giving it a nominal market value of a stunning US$104bil and raising hopes of a new dotcom boom on US markets.

The company's business promise was huge marketing access to the 900 million users of the world's leading social network and data about them that marketers prize.

But analysts said that the large number of shares sold, the high IPO price, and the overall skittishness of investors in a soft overall economy, had undermined market support for the company.

“They just put way too many stocks out at once... before the market was ready to absorb so many shares,” said Michael Pachter of Wedbush Securities.

The price struggled around the US$30 range in the weeks after the issue, with the underwriters undergoing a beating and lawsuits for allegedly having privately lowered their earnings forecasts for the company days before the IPO.

The shares then fell to the low-US$20s range at the end of July when Facebook issued an uninspiring quarterly earnings report.

And last Thursday the price plummeted when a ban on pre-IPO investors such as Thiel selling their shares was lifted many apparently sold.

That lockup applied only to 270 million shares. A further 1.2 billion shares, those controlled by Facebook employees, will be freed from lockup on Nov 14.

While undoubtedly Facebook founder Mark Zuckerberg and other top figures will hold on to most of their shares, anything added to market liquidity is, at this point, downward pressure on the price.

Analysts are debating whether the stock is now a bargain based on Facebook's earnings potential.

“Over the long term, the trade is about the fundamentals of the business, and the fundamentals remain very positive,” Pachter told AFP. He called the problem of a share oversupply “just noise”.

Social media expert Lou Kerner also downplayed the selling pressure.

“We remain very positive,” he said. “Facebook will figure how to monetise mobile, the dollars will find their way.”

New York University finance professsor Aswath Damodaran was more sceptical. After Facebook's quarterly earnings report, he cut his original US$27 a share “intrinsic value” estimate to below US$24.

“The earnings report was a disappointment to markets, revealing less revenue growth than anticipated and an operating loss.” But at US$19, he still is not sure of the investment's merit, given the potential overhang of sellers.

“Facebook remains a company with vast potential (their user base has not shrunk), no clear business plan (is it going to be advertising, product sales or something else) and poor corporate governance,” he wrote on his blog Musings on Markets.

“Eventually, the intrinsic' truths will emerge, but it may be a long time coming.”

Another longtime bear on the stock, Trip Chowdhry of Global Equities Research, retains deep doubts even at US$19 a share. “Facebook doesn't have the technology to monetise social actions,” he said. “With what we know right now, the price should be in the low teens.” - AFP

Citadel urges U.S. to okay Nasdaq's Facebook IPO payback plan

NEW YORK: Citadel LLC urged U.S. regulators to approve Nasdaq OMX Group's $62 million compensation plan for firms harmed by Facebook's May 18 glitch-ridden initial public offering.

Citadel's market making unit bought and sold over $3.8 billion worth of Facebook stock during the IPO and "incurred losses protecting retail investors from the problems caused by Nasdaq," the firm said in a letter on Tuesday to the Securities and Exchange Commission.

Nasdaq filed its all-cash plan with SEC in July.

Regulations cap the exchange's liability at $3 million a month for problems caused by technology issues, and the Facebook accommodation plan would temporarily raise that amount, though not to a level anywhere near the upward of $500 million lost by the major retail market makers in the IPO.

"While the extent of exchange immunity from liability for mishandling orders is an important and complex public policy issue, we submit that any commission consideration of this issue should be addressed at a later time," Citadel said.

Citadel lost around $30 million due to the IPO, a person familiar with the situation previously told Reuters.

Wednesday is the deadline for interested parties to submit comment letters to the SEC on Nasdaq's proposal.

The other top retail market makers involved in the IPO were Swiss bank UBS AG, Knight Capital Group, and Citigroup's Automated Trading Desk.

UBS said it lost more than $350 million when the lack of timely order confirmations by Nasdaq caused UBS's internal systems to re-enter orders multiple times.

A spokeswoman for UBS, which has said it may take legal actions against Nasdaq to recover the full extent of its losses, said the firm had no comment.

Knight said it lost $35.4 million due the IPO. A spokeswoman at Knight said it is still unclear as to whether the firm will formally comment on Nasdaq's reimbursement plan. A source familiar with the firm's plans told Reuters Knight is likely to accept Nasdaq's offer.

A spokesman for Citi, which sources have said lost around $30 million, could not confirm if the firm would submit a comment letter.

The all-cash $62 million reimbursement plan is $22 million larger than Nasdaq originally proposed. The prior proposal was made up mostly of trading rebates, which drew loud protests from other exchanges and market makers.

A Nasdaq spokesman could not immediately be reached for comment. Spokesmen for New York Stock Exchange operator, NYSE Euronext, and No. 3 U.S. equities exchange, BATS, said their companies did not plan to file comment letters with the SEC. A spokesman for No. 4 exchange, Direct Edge, was not immediately available for comment.

In a regulatory filing on August 3, Nasdaq said it is the subject an investigation by the SEC, as well as eight lawsuits by investors and one by trading firms, for its role in Facebook's problematic debut.

While Nasdaq said it believes the lawsuits are without merit, it said it expects "to incur significant additional expenses in defending the lawsuits, in connection with the SEC investigation and in implementing technical changes and remedial measures which may be necessary or advisable." - Reuters

Facebook at half-price: Which way now? 

WASHINGTON: If you bought Facebook shares in the May IPO and held onto them, by Monday morning you would have lost more than half your investment -- and not see any encouraging signs of making your money back. 

Three months after the largest tech share issue ever on US markets, Facebook fell to a new low below $19 a share, compared to the $38 underwriters charged for the 421 million shares they sold.

Although the stock bounced back to close at $20.01, IPO investors were still holding huge losses with, analysts said, not much hope of a quick reversal.

Some key investors were still cashing out -- on Thursday and Friday, billionaire Peter Thiel, who invested in Facebook first in 2004, sold off nearly 80 percent of his huge holding, according to a filing with the Securities and Exchange Commission Monday.

Thiel's average price for 20.6 million shares was $19.73 -- still a handsome profit for such an early backer of the website, but not a demonstration of confidence in the company's potential to rebound.

Facebook raised $16 billion when it went public on May 18, giving it a nominal market value of a stunning $104 billion and raising hopes of a new dotcom boom on US markets.

The company's business promise was huge: marketing access to the 900 million users of the world's leading social network and data about them that marketers prize.

But analysts said that the large number of shares sold, the high IPO price, and the overall skittishness of investors in a soft overall economy, have undermined market support for the company.

"They just put way too many stocks out at once... before the market was ready to absorb so many shares," said Michael Pachter of Wedbush Securities.

The price struggled around the $30 range in the weeks after the issue, with the underwriters undergoing a beating and lawsuits for allegedly having privately lowered their earnings forecasts for the company days before the IPO.

The shares then fell to the low-$20s range at the end of July when Facebook issued an uninspiring quarterly earnings report.

And last Thursday the price plummeted when a ban on pre-IPO investors such as Thiel selling their shares was lifted -- many apparently sold.

That lockup applied only to 270 million shares. Another 1.2 billion shares, those controlled by Facebook employees, will be freed from lockup on November 14.

While undoubtedly Facebook founder Mark Zuckerberg and other top figures will hold on to most of their shares, anything added to market liquidity is, at this point, downward pressure on the price.

Analysts are debating whether the stock is now a bargain based on Facebook's earnings potential.

"Over the long term, the trade is about the fundamentals of the business, and the fundamentals remain very positive," Pachter told AFP. He called the problem of a share oversupply "just noise".

Social media expert Lou Kerner also downplayed the selling pressure.

"We remain very positive," he said. "Facebook will figure how to monetize mobile, the dollars will find their way."

New York University finance professsor Aswath Damodaran was more skeptical. After Facebook's quarterly earnings report, he cut his original $27 a share "intrinsic value" estimate to below $24.

"The earnings report was a disappointment to markets, revealing less revenue growth than anticipated and an operating loss."

But at $19, he still is not sure of the investment's merit, given the potential overhang of sellers.

"Facebook remains a company with vast potential (their user base has not shrunk), no clear business plan (is it going to be advertising, product sales or something else) and poor corporate governance," he wrote on his blog Musings on Markets.

"Eventually, the 'intrinsic' truths will emerge, but it may be a long time coming."

Another longtime bear on the stock, Trip Chowdhry of Global Equities Research, retains deep doubts even at $19 a share.

"Facebook doesn't have the technology to monetize social actions," he said. "With what we know right now, the price should be in the low teens."