Facebook, IPO and Panic

There’s been a ton of coverage about the Facebook IPO disaster, but very little of it looks at the crucial point two weeks ago where things went terribly wrong. It’s becoming increasingly clear that Facebook itself messed up at that juncture.

The screw-up resulted in a major disappointment in Facebook’s stock debut: The stock’s 15 percent decline since the IPO last Friday may not in itself be tragic. But worse, lawsuits are flying saying that legal guidelines weren’t followed. And there’s the sad fact that regular mom-and-pop investors were apparently left with the more losses on average than large institutions who got privileged information. This all was aggravated by a separate annoyance: glitches in the Nasdaq stock market trading process, which caused delays in trade and cancel confirmations, among other things.

However, based on a number of interviews VentureBeat has had with observers and other sources close to the process, it’s apparent that Facebook itself may be most to blame for the fallout. Facebook chose to be more furtive in public announcements about its business than it was in private talks with large investors.

and those famous little phrases.

Now Facebook is generally growing quickly — and its ads are growing, even if they are growing more slowly on mobile — and so this update itself didn’t send any alarm bells to most investors, and it shouldn’t have. After all, Facebook had long warned about this mobile problem, ever since the first IPO prospectus filing on Feb 1, that revenues could be negatively affected by its huge mobile growth, because monetizing mobile hadn’t been proven.

Full article here.