Facebook's initial public offering, which could be called the lead balloon of 2012, was supposed to do more than make money for a few select U.S. banks.
Well, "supposed to" is strong terminology. "Could have, should have and didn't," is more accurate.
The value of Facebook's shares crumbled by 16 percent since its IPO, but it could be argued that the firm's debut was more than just a get-in-early opportunity.
Stocks have been stumbling since elections in Greece and France turned out the old guard and brought in new leaders, who have challenged the multi-billion-dollar bailout loans given to Greece over the past two years.
Investors needed a new hero and Facebook was custom designed for the role. It is a maverick company that runs on sheer momentum, reminding investors of those signs outside McDonald's restaurants that used to say how many billions of hamburgers the company had sold.
Facebook signs up members, like it was selling Big Macs. But it is also a technical company that is wholly based on the Internet. That segment also needs a hero, a company that can make a profit selling nothing but its popularity to brave, new advertisers.
In New Orleans, the Times-Picayune newspaper said last week it would slow down print production from seven days a week to three. It would still be available online seven days a week, but management said it was time to make the aggressive move.
But it is still a move into the unknown. Newspapers run on revenue from printed advertisements – the kind readers hold in their hands.
In general, brick and mortar stores are being trampled by the Internet. The media is changing. Commerce is changing. Then along comes Facebook.
The company is seen as large enough to give stock markets a whole new image, when they sorely need one. It is seen as successful enough to actually pull confidence in the technology sector up to a new level. Famously, it does neither. Banks underwriting the deal begin buying shares to prop up the prices. A technical glitch derails trading temporarily on day one. Instead of adding a bit of shine to the markets, Facebook emerges from its first weeks as a public company tarnished. "Welcome to the Monkey House," Kurt Vonnegut said. Indeed.
In international markets Tuesday, the Nikkei 225 index in Japan gained 0.74 percent, while the Shanghai composite index in China rose 1.2 percent. The Hang Seng index in Hong Kong climbed 1.35 percent, while the Sensex in India added 0.13 percent.
The S&P/ASX 200 in Australia gained 1.14 percent.
In midday trading in Europe, the FTSE 100 index in Britain was flat, up 0.01 percent, while the DAX 30 in Germany rose 0.62 percent. The CAC 40 in France added 0.23 percent, while the Stoxx Europe 600 gained 0.14 percent.
|Additional Analysis: Economic Outlook Stories|
WASHINGTON, May 23 (UPI) --U.S. President Barack Obama was the last obstacle to getting the Keystone XL oil pipeline built through the country, the chairman of a House committee said.