Facebook Faceplants in third Day of Trading

Okay, unlike a lot of people in the chattering class I am not looking at the situation with Facebook’s (FB) IPO with relish and a liberal does of schadenfreude.  I’m actually quite bullish speculatively on Facebook as a revenue platform but I’m not sold on the idea that their management truly understands what it is that they have and how to leverage it without creeping people out.  Given all of that if Facebook had IPO’d near $12 per share I might have been tempted to buy a couple of shares and see where they took the company.

But $38? Morgan-Stanley (MS) had to know that that was an unsustainable price and the minute trading began the HFT algorithmical flying monkeys would be out in a Night of the Long Knives that wouldn’t end until the price crashed, Morgan’s reputation was in ruins and the whole thing flies apart as the biggest joke in the history of the markets.

Welcome to the U.S. in 2012 where chasing capital away with a stick and fleecing the public to make them pay for it is a way of life.

Cue the Muppet Show theme folks because this is only going to end in court.  The sad part is that there are a number of U.S. multinationals that are doing good business right now that are not named Apple (AAPL) and Google (GOOG) but they are starved of capital as people pour their life savings into the biggest Boiler Room scam of all time and what little people have left is sucked up into the hedge fund madness zone.

This is why I’m immediately intrigued by the ideas behind Microsoft’s (MSFT) So.cl social network.  It’s a product that has the same humble beginnings of Facebook without all of the corporate, soullessness of Google+.  Even if it’s successful I can’t see So.cl needing to become a revenue center for Microsoft as it’s not like they need the money.

Which may be exactly where social media in the end has to reside as a means to drive outside revenue not be the engine of revenue itself.

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Tom Luongo

About Tom Luongo

Tom Luongo is a professional chemist and self-taught economist who has been following and trading stocks for nearly 12 years. He has no formal ties to the financial industry and considers that an asset in his analysis of the interplay between monetary policy and capital markets.

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