Set a Long Exposure on Shutterfly

"Our vision is to make the world a better place by helping people share life's joy."

You may want to read that sentence -- from the first page of Shutterfly's (SFLY) IPO prospectus -- once more. It could be a long time, if ever, before another company boasts about such a tenderhearted vision.

Building a better world fits right in with social-responsibility activists, and talking about sharing joy is the stuff of prime-time TV commercials. But this is the stock market, where a better world is one where prices rise and joy is measured by an investor's ability to take money from the pocket of a less clever player.

So, it's a coldhearted bit of irony that Shutterfly's stock, priced at $15 at the offering and blipping happily up as high as $16.73 on its first day of trading Sept. 29, closed Friday at $12.83.

That was 15% below its offering price and down 23% from its high trading point right after its Nasdaq debut.

Such a drop is steep enough to induce Vonage (VG) flashbacks. Vonage went public at $17, rose on its first day, but eight days later closed at $12.32, a 27% drop.

Shutterfly's post-IPO slump is nowhere near as severe, but it's enough to prompt investors to bail out.

And that raises the question of whether Shutterfly deserves a second chance. It's not a red-hot Internet star that will help revive what some consider a constipated pipeline for tech IPOs. It wants investors to think it's more like a dot-com survivor that, because it's in a promising niche, squeaked into the public markets and grabbed $87 million to fortify itself in an ever-competitive market.