Small Fish Burned in Facebook IPO Knew Better: William D. Cohan

You know that the hand-wringing over the almost 25 percent drop in the value of Facebook’s Inc.’s stock since its May 17 IPO has reached a new level of disproportion when ABC’s “Good Morning America” weighs in with the idea that maybe Mark Zuckerberg should abandon his honeymoon and return to Silicon Valley to somehow make things better for the gullible investors who got singed.

Lots of reasons have been posited for the Facebook IPO “debacle” -- as the news media like to describe it -- including that perhaps Zuckerberg, the company’s founder and chief executive officer, and his management team failed to disclose declining quarterly advertising revenue in a timely way. Or that Nasdaq OMX Group Inc. failed to process initial purchase and sale orders properly on IPO day. Or that some underwriters passed “quiet guidance” to big, institutional investors about Facebook’s financial prospects but not to smaller investors. Or that technical “trading glitches” caused the problem. Or that Morgan Stanley, Facebook’s lead underwriter, botched the whole IPO process.