NEW YORK (RNN) - I'm probably not the only poor person who enjoyed watching Facebook stock go over like a dead rat in a punch bowl Friday.
In the preceding days and weeks, media hype crossed the line into frenzy as the greatest company ever stood poised to make millionaires into billionaires and billionaires into super-multi-billionaires and blah, blah, blah.
So now that the Kim Kardashian of initial public offerings closed at $38.23 per share after opening at $38, gaining a fraction of a percent more than nothing at all, the world wants to know why it didn't go to infinity and beyond?
The short answer: Because hype doesn't sell stock. The people with enough money to buy stock in million-share blocks didn't get that loaded by following the investment advice of CNN morning anchors.
Also, a lot of folks were Facebooked out long before Mark Zuckerberg culminated the ballyhoo by ringing the bell to open trading Friday morning. The only things missing were a B-2 bomber flyover, Justin Bieber singing the National Anthem and Joan Rivers offering snarky fashion commentary on the boy genius' patented thrift-store-casual business attire.
I've always had a layman wannabe's interest in finance, big capital, economics and the wealth of nations. I've never had any money, but reading about it has given me a vicarious, frustrating excitement – kind of like looking at Playboy.
I buy Forbes for the pictures. Yeah, I know, it's pretty sad.
But like the insurance salesmen, pizza delivery guys and cab drivers who call radio sports talk shows to criticize veteran NFL coaches' decisions a day after the game, allow me to offer my ignorant analysis.
First of all – if anybody was any good at predicting what stocks were going to do, they wouldn't be journalists, and they sure wouldn't be doing interviews, telling everybody everything they knew. They'd be quietly texting in their buy orders from their yachts.
And that had a lot to do with what happened when Facebook opened at 38 and shot to 42 bucks per share in the blink of an eye. Richie Rich, Scrooge McDuck and Thurston Howell III hit the "Sell" key, made about $40 million in 15 minutes, had a mimosa to celebrate then ordered the captain to steam back to where the marlin were biting.
Bear in mind, too, that stock offerings are underwritten by big banks – like Morgan Stanley, Goldman-Sachs and all the other fine people who gave you the Great Recession of 2008, which is still going great guns to this very day. In case you haven't noticed, those guys haven't been doing so well at guessing the best way to make money. Just as Charles Dickens said of the law in Oliver Twist, the banks are an "ass."
And after the closing bell sounded to cheers of relief, the same guys who predicted skyrocketing gains explained the crash and burn: nobody wanted to carry a long position into the weekend, trading slowed when the computers crashed (that's a good one, I use that every time I miss a deadline); and Facebook is last-generation technology, not positioned to enter the mobile market, which will make laptops and desktops obsolete any minute now.
Sure, whatever. Want some real, solid financial advice?
Bet the Spurs and Celtics into the finals, then take the Celtics in five.
Yeah, like I know.
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