Commentary

Mediocre Facebook IPO Forces Us to Question Material Reality

Bloggers and reporters who write about social media have often been accused of overstating its importance relative to other things like food, water, and shelter. But the widespread angst provoked by Facebook’s somewhat-lackluster initial public offering confirms that we were right all along: Facebook is at least as important as all of human civilization, if not more so.

“If even Facebook can’t have a pop at the open, then should we have faith overall in technology?” This was the plaintive question posed by an analyst on CNBC, reflecting the fundamental existential and teleological crisis opening up before us as Facebook’s shares hover around their opening price. And a profound question it is, indeed worthy of repeating: “Should we have faith overall in technology?” (emphasis added).

One isn’t necessarily used to hearing such probing metaphysical investigations launched on CNBC, which is usually known more for its financial reporting and business information. But I’ve always said we should follow the path to wisdom wherever it may originate: out of the mouths of babes and TV pundits, etc.

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So should we have faith, overall, in technology? On one hand, some might call it impudent to challenge the entire record of human endeavor, beginning tens of thousands of years ago on the African savannah, just on the basis of a weak IPO. Other historical developments might be judged more important, including the greatly-extended average lifespan and vastly-improved material circumstances of most human beings compared to our progenitors in the ancestral environment. True, there have been some setbacks -- the Dark Ages, the world wars, Jersey Shore -- but in the end we have always rallied and returned to the path of progress.

But taking another point of view, is it possible that our gradual but consistent adoption of technology has, over time, rendered us so dependent we can no longer see beyond a worldview that is fundamentally framed by technology? Has our wholehearted embrace of technology -- which leads some cultural theorists to call us “cyborgs” -- in some way blinded us to our own essential humanity? Perhaps our ancestors, as miserable as their material circumstances were, were more truly and authentically human than us.  But then you have to consider that the ability to invent and use technology is viewed by many as an intrinsic, integral part of being human…

Oh wait, it’s back up to $42.  Never mind!

9 comments about "Mediocre Facebook IPO Forces Us to Question Material Reality".
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  1. Marisa Meneely from Broad Reach Digital, May 18, 2012 at 3:05 p.m.

    Hahaha!

  2. David Murdico from Supercool Creative, May 18, 2012 at 3:07 p.m.
  3. Andrew Boer from MovableMedia, May 18, 2012 at 3:21 p.m.

    Erik, Facebook's failure to get a pop doesn't lead me to question my faith in technology, nor does it provoke an existential crisis. The story here is not the role of technology vis a vis humanity, the story is why an IPO has, surprisingly, been fairly valued. Somehow the investment bankers and their private banking clients were unable to reap huge un-deserved profits at the expense of the public. What I think actually happened here is that so many shares in Facebook were floated privately pre-IPO that was essentially no built up demand. The price had effectively been set in the private market. This would mean that Zuckerberg has cleverly managed to execute what Bill Hambrecht tried to do 10 years ago with their auction IPO's --prevented the banks from reaping windmill profits on an IPO--but without taking on the banks directly. Thats my take on it, anyway-- perhaps you should beware of wisdom from TV pundits who are *also* babes.

  4. Denise Leo from SAP, May 18, 2012 at 3:26 p.m.

    Personally I found the brief satirical metaphysical moment refreshing. True and intelligent. Thanks

  5. Steve Sarner from if(we), May 18, 2012 at 3:47 p.m.

    Andrew has it right on "the money" - this was a very well executed and "correctly" priced IPO. Now let's see if that valuation will hold over the longer term. There are plenty of sound arguments to be made for why it will fall but somehow and someway - I think Zuk and team will pull through and justify it.

  6. Khalid Low from Reindeer Company, May 18, 2012 at 4:30 p.m.

    Why do we keep talking about how hedgefunds, investment bankers etc keep reaping huge profits at the expense of the public when the same public can put an end to this by not buying a single stock?
    If the demand is there (and the get-rich-quick greed) these guys will always make massive profits.

    I think after the financial collapse and the ease of obtaining information (as compared to a few years ago) no one can ever say he/she was duped.

  7. Howard Brodwin from Sports and Social Change, May 18, 2012 at 4:43 p.m.

    I agree with Andrew and Steve's comments above - this isn't about questioning technology, it's about business valuation and the markets. And even without the GM story this week, there are still a lot of unanswered questions about Facebook's revenue models -- but to the author's point, with Jersey Shore, there's no question about their revenue model at all ;-)

  8. Roy Fuchs from MFN, May 19, 2012 at 11:13 p.m.

    You miss the point! This has nothing to do with faith on technology or any of that other blah, blah, blah.

    This go round FB and its underwriters chose to price the IPO as close to its perceived value as possible and so allow funds to flow to the seller, not to the day traders.

    Then the underwriters supported the shares when the price dropped below $38.

    So at the end of the day (literally), those who bought at the opening made about 10%. Not a day's pay for so little work.

  9. Chris Nielsen from Domain Incubation, May 20, 2012 at 10:40 a.m.

    Well of COURSE the stock did not go up very much. The price was too high and there were too many shares available. if they weren't so greedy they would have limited the shares not and slowly released more later. They are still going to do that, but what will happen when the new shares are released? I think the price will drop, many will bale, and others will scoop up shares at a more reasonable, lower price. Those people will make a lot of money because as the share price rises back towards the $38 level, they will sell. I think in time the price may go much higher than $38, but I think it will be a long wait if FB doesn't jump on the context ad gravy train and replace their pathetic home-brew system with one that works, like AdSense. FB should be earning the kind of cash torrent that Google does. The question in my mind is can the punks grow up quickly enough to avoid following MySpace into the large unabridged volume of "What Could Have Been". :-)

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