This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
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!

We Continue to Bury the Big Facebook Stories

Stocks in this article: FB NFLX AAPL

Aside from that it was all about the human drama associated with following and investing in these high-flying battleground stocks. Fortune's Philip Elmer-DeWitt did one of the best jobs capturing this emotion in his March 2013 story, The rise and fall of Andy Zaky, that chronicled how an AAPL-only hedge fund cost individual investors millions of dollars.

Facebook became one of the most textbook Peter Lynch stocks of all-time. Invest in what you know. And can you blame investors who felt like the Facebook IPO was the time for them to get into the stock market?

I don't think the security guard who put $1,000 into FB stock the first day it traded publicly represents random anecdote. In fact, I bet there are tens of thousands, maybe hundreds of thousands of people just like him. When he told me he put $1,000 in FB, I asked if he was still holding it. His reply, after a smirk and shrug, "Yeah. And I'm just waiting to see if I can break even!"

Folks threw lots of blame around after Facebook went public and the stock tanked. Make no mistake, people pointed fingers because the stock went down. There would have been less ruckus if the IPO fiasco happened alongside a rising stock.

I purchased one share of FB stock on the IPO, just to be part of the experience as I realized after the opening bell on May 18, 2012, what was going down. I think I bought my share at around $42.50, but, like so many other investors, my brokerage didn't send me a trade confirmation for hours. I had no idea where I was at with the trade. To me, it didn't matter. I was just conducting field research with one measly share. But it must have mattered to the security guard, teacher, barista, social worker, carpenter, florist, administrative assistant or flight attendant who put $1,000 or more on the line.

As it turns out the brokerages and NASDAQ, not Facebook, ended up dealing with the brunt of the fallout. Because Facebook did nothing wrong. As I pointed out in June of last year, the company clearly outlined the risks associated with its business in public documents filed ahead of the IPO. It's not Facebook's fault if investors and much of the media didn't heed the company's warnings that ad revenue could slow down as users make a rapid shift from the desktop to mobile. In fact, Facebook used the word "mobile" approximately 170 times in each of these public documents I speak of.

But I don't expect the individual investor with $1,000 who has never heard of Peter Lynch to know these things. In a perfect world, he or she would. But that's not reality. In my word, the media, particularly the financial media, needs to take some share of the responsibility.

Last year, before Facebook went public, most of the media spent more time on the spectacle of the IPO, not the risk section of the company's S-1. And here we are again more than one year later. The media's doing the same type of thing. They're hyper-focused on Facebook's flirtation with $38, but largely ignoring the meaty stories that actually matter.

-- Written by Rocco Pendola in Santa Monica, Calif.

Rocco Pendola is TheStreet's Director of Social Media. Pendola's daily contributions to TheStreet frequently appear on CNBC and at various top online properties, such as Forbes.
2 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
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!

Markets

DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from Bankrate.com

  • 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