Did Facebook investors “Like” the IPO?

Well, it depends on who you talk to. If you are one of the inner circle with millions of shares built up over the years since Facebook was created in a Harvard dorm, then yes, you really like Facebook’s going public.

No doubt one of the most anticipated IPO’s in Wall Street history, Facebook’s first day on the market closed flat. The stock was issued at $38 and climbed to $45 during the first day of trading. Well that’s good except when the closing bell rang, the stock settled only  $.23 higher. Ho hum!

Here is what is supposed to happen. The stock issues at $38. In the first day of trading the Investment bankers make their billions back when the stock soars to $99. Great! The price is driven up by retail investors who then own all those shares at the higher prices. Usually, the retail investors eat last. They buy high and hope the earnings can support their purchase prices. Well that didn’t happen exactly so now, Goldman Sachs for instance never did get to sell their 11 Billion in stock and convert it into God knows how much.

Who has money? Seriously, think about it. All these little investors have just been through one of the worst economic runs in decades. No one has equity in their house anymore and the 401k accounts are down to the nub. Who has money to invest these days?  Second, if you did have the bucks, what do you know about how the 28 year old CEO is going to perform after his 19 billion personal payday. Last I checked there were 900 million registered free users. Where will the revenues come from?  Mark Zuckerberg has his work cut out.

What will motivate Zuckerberg to drive the company?  money?, prestige?, college loans? He needs a new car? Some say he can spend $300,000 every day and still have money in the bank when he is 80 something. Nevada is laying off 1,100 teachers, all with Master’s degrees and teaching credentials,  because of budget deficits. Just sounds so out of balance.

Mark Zuckerberg, founder and CEO of Facebook

Mark Zuckerberg, founder and CEO of Facebook (Photo credit: Wikipedia)

I believe most of the folks who could have bought the stock and didn’t just moved over to let the next guy win.  Big day on Wall Street! Sorry I missed it, I was on the golf course.


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