This Day On The Street
Continue to site
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

Mark Cuban Gets Facebook; Most Others Don't

NEW YORK ( TheStreet) -- On Tuesday, Dallas Mavericks owner Mark Cuban injected sanity into the increasingly absurd Facebook (FB - Get Report) conversation. He referred to New York Times writer Andrew Sorkin's contention that CFO David Ebersman deserves all of the blame for the company's IPO swoon as "just ridiculous."

At his blog, Cuban beat back the type of inanity Sorkin feels the need to keep alive:
Facebook was able to raise about 10 BILLION DOLLARS in this IPO. The CFO's job is not to manage shareholder portfolios. His job is to help Facebook succeed. I don't know about you, but putting 10 BILLION DOLLARS in the bank in my opinion is one way to help them succeed.

Cuban blamed individual investors and, where applicable, stockbrokers for Facebook-related losses. He didn't externalize; not even over his own FB losses.

As Cuban explained, Facebook acted in its own self-interest. In the S-1 filings many prospective investors disregarded, Mark Zuckerberg made it perfectly clear. His company manages the user experience, not the stock price. Why would anybody expect Facebook to make an exception during the most important stage of the IPO process?

Despite my contention that Twitter will live and Facebook will die, I'm with Cuban. Scroll my article history. I have been for months.

Like Sorkin, TheStreet's Eric Jackson misses the mark in his response to Cuban's comments.

Jackson claims Facebook will have difficulty executing a secondary offering.

That's a premature analysis. Should the company's outlook improve over the next six to 12 months, it will face little trouble fund raising. That said, Facebook likely never intended or will need to go to the street for cash.

Facebook maxed out its IPO. It loaded its coffers. Now, it hunkers down and resumes a hyperfocus on the business. It has no time for shareholder whims. Today, they want an explanation, tomorrow they'll ask for a dividend.

Facebook must act somewhat hostile toward shareholders because, no matter how they explain it, most investors do not understand the DNA of a perpetual startup. Impatient shareholders generally do little more than erode the culture and shorten the life of a perpetual startup.

Jackson calls Zuckerberg, Ebersman and early Facebook investor Peter Thiel "short-sighted."

Again ... read the S-1. Zuck exudes nothing but long-term thinking. Jackson admits as much, but then labels the IPO cash grab a short-term move. Which is it?

As for Peter Thiel, he has been in Facebook since 2004.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

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

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
FB $88.15 0.00%
AAPL $110.37 0.00%
GOOG $606.25 0.00%
TSLA $245.57 0.00%
YHOO $32.54 0.00%


Chart of I:DJI
DOW 16,374.76 +23.38 0.14%
S&P 500 1,951.13 +2.27 0.12%
NASDAQ 4,733.4970 -16.4820 -0.35%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs