Everyone wanted a piece of the action. But investors eventually learned the hard way that over-subscribing to an idea means nothing if it can't manifest itself into results.
I'm not going to absolve Facebook of the fiasco that surrounded its IPO. But there's not much a company can do when the market falls in love with its stock. The hysteria reminded me of the chaos created in the late 1990s when, out of nowhere, lousy companies pitched their tents on the Nasdaq at breathtaking valuations. All they needed was a Web site and a patent.
It's true that some nimble traders did well. But investors forget the IPO frenzy also caused a lot of damage.
Over the past several years, the IPO market has been, at best, hit or miss. The market's love affair with Facebook's IPO was just one recent example of how investors remain thirsty for instant gratification. While it's still too early to say definitively how Facebook will be looked upon down the road, the picture is much more clear for other recent IPOs. We're going to look at three companies that hit the social scene a couple of years ago with equal amounts of fanfare only to have investors realize that, as in any IPO, there are no guarantees of long-run success as a company or a stock.