Who Cares About Facebook?

Let our journalists help you make sense of the noise: Subscribe to the Mother Jones Daily newsletter and get a recap of news that matters.


Yesterday Facebook announced they were raising the target price of their IPO from $34 to $38 per share. This can mean lots of things, but the conventional view (i.e., the one Facebook and its team of bankers would like you to believe) is that it represents wild enthusiasm for Facebook stock. But where is this enthusiasm coming from? Like me, Felix Salmon isn’t sure:

The press loves IPOs, because they’re one of the few occasions when the stock market delivers a significant news event which can be prepared for in advance. But the public? The whole investing-in-IPOs thing just feels so late-90s to me, and the performance of stocks like Groupon and Pandora is hardly likely to spark another feeding frenzy.

So when Henry Blodget describes the Facebook IPO as muppet bait, I do wonder who the muppets really are. Is it a genuine horde of individual investors, all clamoring to get in on the hot new stock offering of the decade? Or is it the muppets on CNBC, following Mark Zuckerberg’s every move like he’s the Pied Piper of Hamelin, only with a hoodie instead of a magic pipe?

The right way to think about IPOs doesn’t really have much to do with the fundamentals of the company itself. Who cares if Facebook is going to be either (a) a flop or (b) the biggest company in the galaxy five years from now? All you really care about is Facebook’s stock price the day after the IPO. Or, at most, a few months after the IPO. What you care about is whether other people are enthusiastic about Facebook. That’s it. It’s purely an exercise in forecasting the madness of crowds.

So who are the muppets? I guess they might be retail investors, but my guess is that they’re mostly big, sophisticated Wall Street guys, all trying to read each other’s minds. It’s the same game they play with every other security they trade, and they’re all convinced that someone else is the idiot. Main Street is just a sideshow.

UPDATE: And speaking of Facebook, the powers that be at MoJo have created a Facebook fan page for me. You can see it here:

https://www.facebook.com/drumblog

I have to confess that I don’t really understand why someone would rather read a Facebook page instead of just reading the blog, but that’s probably because I’m a 53-year-old dinosaur. However, even if you don’t want to read me on Facebook, maybe your kids do. Send ’em the link now!

THE TRUTH IS...

what drives Mother Jones' team of 50-plus journalists. The truth is powerful, as evidenced by how hard those with something to hide, or profit to gain, seek to discredit it. The truth, stated boldly and reported meticulously, is what draws so many readers to Mother Jones.

And the truth is, going into the final 4 days of the year we still needed to raise $TK to hit our $350,000 goal and start 2021 on track. It's nerve-wracking, wondering if the big spike we normally see at the end of December is going to be another thing that doesn't go as planned in 2020, or worse, if, now that Donald Trump is set to leave the White House (for longer than a taxpayer-funded golf trip to a property he owns), folks might be pulling back from fighting for the truth and a democracy and think the hard work is done.

It's not, and if you can right now, please consider a year-end donation to support our team's fearless nonprofit journalism so we can close that big fundraising gap and finish the year strong, ready for all that's ahead in 2021. Whether you can give $5 or $500, it all matters in keeping us charging hard, and we'd be grateful.

payment methods

THE TRUTH IS...

what drives Mother Jones' team of 50-plus journalists. The truth is powerful, as evidenced by how hard those with something to hide, or profit to gain, seek to discredit it. The truth, stated boldly and reported meticulously, is what draws so many readers to Mother Jones.

And the truth is, going into the final 4 days of the year we still needed to raise $TK to hit our $350,000 goal and start 2021 on track. It's nerve-wracking, wondering if the big spike we normally see at the end of December is going to be another thing that doesn't go as planned in 2020, or worse, if, now that Donald Trump is set to leave the White House (for longer than a taxpayer-funded golf trip to a property he owns), folks might be pulling back from fighting for the truth and a democracy and think the hard work is done.

It's not, and if you can right now, please consider a year-end donation to support our team's fearless nonprofit journalism so we can close that big fundraising gap and finish the year strong, ready for all that's ahead in 2021. Whether you can give $5 or $500, it all matters in keeping us charging hard, and we'd be grateful.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate