NEW YORK (TheStreet) - "Every battle is won before it's ever fought," (thanks, Sun Tzu). Those words, first uttered over 1,000 years ago and made famous again by Gordon Gekko in the 1987 movie "Wall Street," epitomizes the Facebook (FB) - Get Report IPO.

Two mobs of investors woke up the morning of the Facebook IPO. Both mobs were excited, and probably many people found it difficult to sleep the night before.

On Friday, the day of the IPO, billions of dollars and shares in a Web site changed hands. Incredible amounts of wealth transferred from various trading accounts during the day of the IPO and since. One mob was relatively unsophisticated investors and the other consisted of seasoned pros.

The Facebook hype machine convinced countless people they could simply sit down in front of their computer and play a straightforward game, leaving a winner. In

Caught Holding the Facebook Bag

, Richard Saintvilus describes many of my thoughts with newly minted investors wanting to cash in on Facebook. Like most games, this one is simple enough, but skill almost always trumps luck.

More on Facebook: The Big Lie of the Facebook IPO>>

Take chess, for example. If you're like many people who require a picture to verify the starting position of the king and queen on a chessboard, do you think you will survive playing in a competition that includes Bobby Fischer, Viswanathan Anand (current world champion) and others who play for a living? It's no different on Wall Street where professionals play the game every day.

Many investors confuse a fantastic product with a great investment. One of the biggest investment mistakes I have witnessed with consistency over the years is the simplistic assumption that a well-liked product or company by default makes a good investment.

Altria Group

(MO) - Get Report

is a stock I believe offers value. Altria pays a high-yielding dividend, and consistently makes money for shareholders. Altria markets products like Marlboro, and smokeless tobacco. Altria is not a company that excites the popular imagination like Facebook. Yet portfolios with MO in the last two years have liked MO more than most Internet IPOs.

More on Facebook: Recap of the IPO >>

Buying Facebook is not the same as buying ownership in most companies. Normally management teams have to please their shareholders. In the case of Facebook, management doesn't need to make all its shareholders happy. Management is concerned, just not about your shares.

Distracting Vows

There is only one shareholder in Facebook that really matters. Mark Zuckerberg owns enough shares to exercise total control over the company. If Zuckerberg desires a raise next year, he doesn't have to convince a compensation committee -- there is no compensation committee. Zuckerberg doesn't have to convince the board of directors to increase his pay; he can order them to do so. The reason why the board of directors and everyone else in the company will do as he says is he remains in total control of the company.

In the very first move as a public company, Zuckerberg demonstrated his corporate leadership abilities with the pricing of the IPO. Of the people who fully understand the value of Facebook, one would imagine Zuckerberg is at the top of the list.

Yet at a time when Facebook needs leadership and guidance during the transition from private to public status, Zuckerberg's wedding showed he had taken his eye off the ball. Investors are trusting Mr. Zuckerberg with billions of dollars and either the IPO date was poorly planned, or wasn't significant enough to receive the undivided attention of the management team.

Either way investors don't "Like" the captain of a ship celebrating away from the helm while the ship navigates through perilous waters. With Facebook trading under $30 a share the results of such inattention become clear.

Zuckerberg needs to convince investors quickly that $29 a share is a bargain to halt the price slide. Losing the hoodie and finding a tie may help convince non-retail traders Facebook is about making money and not an extension of Zuckerberg's ego.

At $29 a share the forward price-to-earnings ratio is still over 45. I consider anything over 20 expensive; however, if Facebook can triple their bottom line in the next two to three years, 45 doesn't appear terribly expensive.

If Facebook doesn't perform with near flawless precision, $38 a share will be remembered as an unreachable dream. Is Zuckerberg up to the task?

Friending Zynga

Making money buying a stock with a price-to-earnings ratio of 45 appears to be challenging considering Facebook's success at the moment is significantly tied to the success of game creator and partner

Zynga

(ZNGA) - Get Report

. If Zynga earns 24 cents this year (average analyst estimate, with a range from 23 cents to 32 cents), Facebook investors will have a little less to worry about. Zynga at $6 per share will still cost 25 times this year's earnings average estimate.

Zynga is becoming oversold technically. I believe investors should watch for a bounce that may create a short squeeze, especially if shares continue under pressure near earnings.

Unlike Facebook up to now, the other social network,

Google

(GOOG) - Get Report

understands mobile advertising. Facebook's almost-certain targeting of large advertisers is also the reason why Google will almost certainly run circles around Facebook. Google makes it easy for advertisers and publishers of all sizes to connect with each other, something Facebook will need to do.

After years of Google eating

Microsoft's

(MSFT) - Get Report

and

Yahoo!'s

(YHOO)

lunch, these major competitors have not only failed to provide as good or better user experience, they have failed in fully monetizing searches. At 45 times future earnings, investors in Facebook are betting heavily that Zuckerberg will accomplish where others have failed.

By most measurements, Microsoft and Yahoo! have failed to exploit the influence and power of social networks. For Yahoo!, it's one more example of coming so close to the goal, only to drop the ball. Google on the other hand, succeeds handily in most of its endeavors. Even if you dismiss Yahoo!, Google is decidedly in the game.

Facebook will likely grow, albeit not in a vacuum. Expect tough competition and no free lunches from Wall Street.

Options now trade with Facebook and provide an excellent tool to mitigate your risk. It's too early to know how far Facebook will fall (I will begin looking to get long under $25, as I don't mind if I miss out of this one), but at some point soon it will become oversold.

At the point I believe Facebook is oversold, I will short put options one or two strikes out of the money. Selling put options instead of buying the stock directly is like wearing leather gloves while catching the proverbial knife.

Author does not hold a position in any stocks mentioned.