It was the biggest IPO in US history and everyone was
clamoring to get in on it. And it could
well be the biggest scam since Fannie & Freddie cooked the books.
The insiders sold the public about $16 billion worth of
stock, making a bunch of new paper billionaires. But the hype was more gut than analysis. There are millions of people with Facebook
accounts and they all wanted some of the stock.
Is there a case to be made for the longevity of Facebook, or
are people going to go to the next thing after they get tired of posting
pictures and messages for their friends and find that most of those messages
are really not very interesting? What
are the barriers to entry for competition?
What about other sites like LinkedIn?
What about GM’s announcement that it was dropping Facebook advertising because
it wasn’t effective? What about the syndicate that underwrote
Facebook having to come into the market and buy stock to keep the price above
the $38 offering price?
It’s dangerous and financially risky to invest in fads,
unless you can find a greater fool to take the stock off your hands at a higher
price than you paid before it crashes. 28
year-old Mark Zuckerberg found a bunch of suckers to make him one of the
richest men on the planet. My money is
on the prediction that he will be unloading more of his stock as soon as he’s
legally allowed.
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