NEW YORK ( TheStreet) -- The Facebook (FB - Get Report) IPO brought people into the market who might not have otherwise entertained the idea of buying an individual stock, let alone investing period. Sadly, many of the folks it introduced to the market are as turned off today as they were turned on prior to the big day.
The whole unfortunate situation reeks of Barack Obama's campaign and subsequent first-term as president.
The big O turned plenty of people on, particularly some of the nation's not-so-politically active, such as young people, only to sour many of them on the process shortly after election. Four years ago, even some conservatives gave Obama credit for inspiring people to get involved and embrace the notion of Hope and Change.
Of course, Obama ended up selling out the anti-war left and other liberals who supported him thanks to his uninspiring "pragmatic" ways. Now, he only gets support from the parts of these factions that would rather die than see a Republican in office.There's a similar dynamic in play, at least in part, in relation to the Facebook IPO. Facebook gave casual and non-investors a reason to get active in the stock market. On the surface, it all makes perfect intuitive sense. Facebook has not only become part of the culture, but, unlike other IPOs, it's a profitable business with billions in revenue. Many other recent offerings can't say the same; in fact, they lose money, which, presumably and sensibly, scares people away, especially the uninitiated. Couple Facebook's success with the fact that most people use it regularly and it's no wonder interest from Main Street was high. Sadly, plenty of good people learned the hard way when Nasdaq blew and the media overhyped the Facebook IPO. What a horrific introduction or reintroduction to investing. On the bright side, we learned lessons from this IPO. An important one -- be careful using the investing philosophy of buy what you know. Often, it works wonders. At other times, not so much. Consider Yelp (YELP - Get Report). Ad-supported Web sites get a bad rap thanks to companies like Yelp.