Facebook IPO Reality Check

Come on, people... stop complaining about the rapid decline in value of your newly purchased Facebook stock.  I have so many friends who invested in this over-hyped company, and they truly have no right to cry over the resulting losses. 

Did anyone even look at the history or statistics backing the IPO?  Or read the prospectus?

Here's a quick reality check:

1. Facebook was grossly overvalued.  No company in history has ever been worth 60 times it's projected annual earnings.  Even glorious Apple trades at 14 times (or less) it's annual revenue.  The valuation is even more fishy when you examine some of the other factors at play:  growth rate was already in decline, profit margin was inordinately high at 50% with nowhere to go but down, and user base was migrating to unprofitable mobile devices. 
2. Facebook had already reached it's zenith and was beginning the slow decline toward it's nadir BEFORE the IPO happened.  Zuckerberg only acquiesced to the IPO (which he didn't want to do) because there was never going to be a better time to cash in.  Something substantial must change with the business model - which thus far has not happened - if Facebook is to uncover new ways to monetize the user base.  Otherwise it will remain what is has been: a product development collective where 'business' only exists to fund more important activities.
3. Mark Zuckerberg made it crystal clear that he doesn't care at all about sharing power or building shareholder value.  He intentionally set up the company so that he has total control and can ignore everyone's opinions.  He's been perfectly candid about valuing Facebook's social mission and services over profits, so no one should be shocked that he's making good on his promise to focus on the long view.  Now shareholders are questioning his leadership, but he's only following through on his stated plan (and deflecting your barbs beautifully while doing it).  Stop whining everyone - you should have seen this coming.
4. Other insiders had to wait just 9 short months before selling 2 billion shares of Facebook stock, which would naturally flood the market.  Unless you could capitalize on a short spike (which didn't happen anyway), this influx of insider shares would devalue the stock shortly after the IPO.

The first sentence of Zuckerberg's open letter to investors said this, "Facebook was not originally created to be a company. It was built to accomplish a social mission - to make the world more open and connected." 

Sorry folks.  I think he meant what he said.  It may take decades to see how his grand scheme plays out, and most of you probably don't want to hold onto your shares for that long.