It has been said that the IPO of Facebook (FB) has been a disaster for everyone involved. But there is one group that has been a clear winner, and that is the media. In what could have been a slow news week ahead of the long holiday weekend, the media has had an endless supply of news to report regarding the Facebook IPO.
Even before the disastrous IPO, the media was riding the wave of FB hype. For the Wall Street Journal alone, FB has been featured in front page (A1) headlines and/or pictures on 11 of the 21 issues so far this month. In fact, the company has been featured on the cover in each of the last nine issues going back to 5/15. We're not even sure if Lehman was featured that many days in a row back in September 2008!
Interestingly, while the media is often blamed for overhyping things and only showing the positive on certain issues, in the case of FB, this doesn't seem to be the case. On May 15th, the WSJ headline read, "In Facebook IPO, Frenzy, Skepticism." The next day, the WSJ reported that "GM Says Facebook Ads Don't Pay Off." Finally, the company reported the next day that, "Facebook Insiders Boost Plans to Cash Out in IPO." These headlines were all before the IPO.
So by just reading the headlines of one newspaper, a casual observer would have seen that there was 'skepticism' in the IPO on the part of investors. Furthermore, just one day after one of its biggest advertisers did not think its ads on Facebook were effective, insiders raised the amount of stock they wanted to sell.
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