This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Facebook: When the Buyer Did Not Beware

Stocks in this article: FB

NEW YORK ( TheStreet) -- I've got nothing but love and respect for CNBC and TheStreet's Jim Cramer. He does what the best writers and media personalities do. Cramer prompts you to think, react and reconsider your own convictions.

On Tuesday, I thought, reacted and reconsidered after reading Cramer's latest article on Facebook (FB), The Disgrace of a Stock Lifetime.

In the article, Cramer lashed out at the Facebook situation:

I don't know about yours, but I have to tell you that the sour taste of the Facebook deal hasn't left my mouth yet.
If you go back just a couple of weeks, we were at a crucial moment in time. The individual investor has been crushed for so long now that it was almost impossible to think about what could bring him back to stocks ...

I could not agree with Cramer more. As with Tiger Woods heading into the US Open coming off of a win at the Memorial, Facebook brought otherwise casual observers and many non-participants into the stock market. It's a shame that things did not turn out better, but you cannot blame anybody but yourself if you got taken by this IPO.

At every turn, the individual investor expects to be spoon-fed or, put aptly, protected from herself.

One of the biggest gripes from Main Street posits that only insiders knew Facebook expects a possible slowdown in revenue due to mobile monetization issues. That's interesting.

Facebook went public on May 18. On the U.S. Securities and Exchange Commission's Web site, check out the page that lists all of Facebook's filing.

Starting with the amended S-1 on April 23, Facebook mentions the word "mobile" roughly 170 times each in five amended S-1s leading up to the IPO. If you search (CTRL-F on a PC) "mobile," you will see that a lion's share of those occurrences mentions clearly and specifically warn of a possible slowdown in revenue as the rapid shift from desktop to mobile outpaces Facebook's ability to place ads in front of its users.

That's public information. Was Facebook supposed to deliver an S-1 to every household in the world via overnight mail? Was Mark Zuckerberg? How about Morgan Stanley (MS)? Maybe the SEC should have been charged with the task? Of course, large factions of society would have moaned about a "waste of taxpayer money."

Please allow me to digress, but also understand I am not being sarcastic.

That information was public. I would venture that people who follow the stock market on an hourly basis rarely look at SEC filings, listen to conference calls or read more than the headlines the mainstream media hand picks for them. But, yeah, only "insiders" had the knowledge that Facebook might experience mobile monetization problems. Since when was an insider a person with an Internet connection, a brain and an ounce of initiative?

1 of 3

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,356.87 +288.00 1.69%
S&P 500 2,012.89 +40.15 2.04%
NASDAQ 4,644.3120 +96.4780 2.12%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs