A tale of two thoughts on Facebook

Some of you may have already read the NYT piece by Andrew Ross Sorkin who squarely put the blame of the Facebook IPO fiasco on the shoulders of CFO David Ebersman.  According to Sorkin, Ebersman totally misjudged the demand of Facebook stock and the price people were willing to pay.

On the other hand billionaire NBA Dallas Maverick owner Mark Cuban sees things a bit different.  Cuban in his blog post, points out that it was not Facebook's job to manage investor portfolios.  In fact, it was Ebersman's job to get the best deal for Facebook which meant getting the most money that he could.  The end result for Facebook was $10B into it's coffers.

I tend to side with Cuban on this.  There was allot that went wrong with the Facebook IPO which involved quite a few moving parts not to mention a technical meltdown with the NASDAQ which Facebook listed with.

If it was Ebersman's job to get the most money that he could then he did his job well.  People that expected the stock to skyrocket up basically gambled and lot.  We said from the beginning based on initial data and price points that Facebook was going to be over valued to start with.  It's only been until the last week that we at DWCM have started to consider adding a position within our portfolio.  This after the stock has plunged about 50% since its IPO price.