Nemo’s Monday market crash failed to materialize. Not that he is disappointed; market crashes do no one any good except mean-spirited anti-American short sellers who pay no taxes and move to Singapore. What is driving today’s mild optimism is unclear; pundits who generally ascribe such behavior to “guarded optimism on core manufacturing earnings” or “a marked improvement in consumer sentiment” offer no such suggestions at present. The general opinion seems to be in the dead cat bounce sector; the damn thing has sunk six straight days; it has to go back up a little sometime.
Still, my concern that the Facebook stumble would set off a 1987-like selloff — a bit of a reach, really, but, for some reason, one we found compelling enough to mention it — proved unwarranted, at least for now.
Facebook itself, on the other hand, has not fared well, trading right now at about four points below its IPO price, and about 25% down from its high Friday. We suspect there are a lot of investors who are hissing steam like battleship boilers out there at the moment, nor do we see any particular reason that the price will improve any time soon. The open question remains: has the money to be made investing in Facebook already been made? Maybe.
Groupon, LinkedIn, Facebook, Twitter and all the rest of the social media tech group remind me of lasers. Everyone knew they had great potential for something or another; they just didn’t know what. For years, lasers were dismissed as “a solution looking for a problem.” No one busy cutting sheets of metal in half with colored beams of coherent light really imagined a future where their Flash Gordon toy would figure in everything from printers to compact disks.
No one seems yet to have figured out a way to monetize social media. They will, and chances are pretty good it won’t look anything like what we see today or imagine today. Facebook itself is an incredibly clumsy, clunky and fault-ridden structure with no real unique technological foundation. Twitter is the digital version of monkeys chattering in the treetops.
More will follow, better and better and better. In the meantime, the best way to make money on tech is probably not by leaping at “greater fool” offerings like Facebook.