Ask HN: Are we drawing the right conclusions from the Facebook IPO?

All of this Facebook talk is really starting to irritate me. Everyone is doing IPO postmortems, but I still think they haven’t grasped the real point. Here are my take-aways from the IPO:

• This is not 1999. Stop worrying that it is. • We created the hype around Facebook. Facebook as a company really had nothing to do with what just happened. They were just along for the ride, like the rest of us. • If you don’t think Facebook is worth $100 billion, <b>then don’t buy Facebook shares</b>. No one is forcing you to. • The IPO process is incredibly broken and incredibly inefficient, still favors Wall Street insiders to the disadvantage of retail investors, and is simply not transparent. But given the interconnectedness of today’s world, all of this will change soon. The IPO process as we know it will be fundamentally reborn in the new future, and it will become much more fair. Otherwise, no one will want a part of it.

Don’t believe me? Let’s take a look at some of the postmortem analysis from the past few days: (NOTE: Some of these articles make good points. I’m only pointing out the things I disagreed with)

Gawker – The Facebook IPO Was an Inside Job http://gawker.com/5912419/the-facebook-ipo-was-an-inside-joke (accessed on 5/23/12)

“Facebook's stock continues to suck harder than a Northwestern University freshman on a 5-foot bong in his profile pic.” Your snarky opener is really contributing to the conversation.

“It turns out that the insiders who did the Facebook deal withheld some important information that showed it wasn't such a good deal after all. Analysts at three of the major underwriters, including Morgan Stanley and Goldman Sachs, significantly reduced their forecasts for Facebook's revenues just before the IPO, according to Reuters. They did not widely publicize this information via, say, a Facebook status update. They quietly shared it with their buddies at hedge funds and other big investment firms, many of whom cut back on their investments accordingly. Meanwhile, the general public continued to froth at ever-climbing valuations.” Yes, this is something that the bank analysts and Wall Street syndicate partners appear to have done. And it angers people, rightly so.

“"Facebook was whispering in the ears of the lead managers of its investment banks, on the understanding that the results of those whispers would remain available only to select clients until after the IPO was over," writes Reuters' Felix Salmon. This doesn't seem to be illegal, just shady as hell.” Is Felix really saying this is true? That Facebook actively and intentionally whispered material, non-public information into the ears of the Wall Street analysts? If so, that’s pretty damning. But I’ve read Felix for a while and I don’t think he would make a claim like this without having the facts. We’ll go to the source in a minute.

“So, Mark Zuckerberg screwed Facebook investors in the IPO like he's screwed Facebook users on privacy. (Hours before the IPO, Facebook was hit with a $15 billion lawsuit over privacy violations.) This would be just a hilarious coincidence, except for the vast amounts of money he's made doing both.” I see that this is the conclusion you’ve drawn. I disagree. I think you’re making assumptions that aren’t correct and need to reexamine your thinking. But I’m sure you got some pageviews because of your conclusions. That’s your job, after all: to get pageviews. Not to be right.

Felix Salmon, Reuters – The Facebook earnings-forecast scandal http://blogs.reuters.com/felix-salmon/2012/05/22/the-facebook-earnings-forecast-scandal/ (accessed on 5/23/12)

“As Henry Blodget says, this whole episode stinks. It’s almost certainly not illegal. But if you look at the Finra rules about such things, it definitely violates the spirit of the law. For instance, the rules say that Morgan Stanley analysts weren’t allowed to show Facebook their research before it was published — but they don’t say that Facebook can’t quietly whisper in Morg...