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NEW YORK (
TheStreet) -- On Friday, like most of you, I watched the nation's media help to perpetrate one of the great frauds in American history.
Consider. If I can barely sell 15% of something at $38 a share, if I have to lay out millions-upon-millions of dollars to prop up that price for a single day, what makes you think I can sell the rest of it at that price, or anything like that price?
Yet there was
ABC News claiming that Bono's
Elevation Partners "made" $1.6 billion in the
Facebook(FB - Get Report) IPO. There were anchors on all the other networks breathlessly claiming that there were now hundreds of "Menlo Park millionaires" who held shares in the social networking company.
I spent much of the day at
Stocktwits, watching people with money comment on the action in real time. As the day went on, the mood went from euphoria to anger to disgust. A typical comment: "When I got up today, it felt like the Superbowl. Now it feels like it's the 4th quarter of a 45-0 blowout."
The insiders knew the story: The brokers who were in the IPO were standing by with orders to buy at $38, no matter what, all day. And they knew, we all know, that won't go on for long.
Even while this was happening, with Facebook trades coming across at
both $42 and $38 and change at the same time in after-hours trading,
CNBC kept pretending nothing was happening on its own ticker.
Why wasn't anyone, on any network, allowed to say that this new technology emperor was wearing no clothes, that the company wasn't worth anything near what brokers were claiming it was worth, that a fraud was being perpetrated on the public investor?
I'm still waiting for an answer.
Now I know Facebook makes a great story. It sounds just like the dot-com bubble of the 1990s, where everyone believed they could get rich quick. Even me.
But it was nothing like that.
The gains were all gotten by the insiders, by the venture capitalists and brokers who bought into the company first. I have no doubt the company is worth many times what Bono paid for his stake. But by the time Facebook went public -- long before, in fact -- it was a fairly mature enterprise facing serious headwinds.
In short, Facebook has peaked.
I know. When
Time Warner(TWX) bought
AOL(AOL) back in 2000, no one wanted to write that the dot-com boom era was over, that it was all about to go pear-shaped, that we'd found the maximum price for Internet assets and it was all downhill from there.
Well, I did. I wrote it at ClickZ, and I wrote it on my a-clue.com newsletter. But I'm just a stupid blogger. No one listens to me. And I'm still a stupid blogger.
But I'm still right, too.