Facebook: All Greased Up In Snake Oil

On the first day that Facebook became an Initial Public Offering (IPO), the stock opened at $38/share; then, rose to $45; and it has been sliding downwards ever since. Today, it reached a low of $26.83.  If you were unfortunate enough to buy into the hype and bought it at $45, you're now down 40% on your investment.  Down 29% if you bought at $38.

In stock trading, investors and traders, alike, are also reminded not to try and grab a falling knife.  And, for sure,  Facebook is a falling knife.  The problem with a stock like this is that it had theoretically hit its high point last year.  Much of the shine is off the company because it appears that people are tiring of the format.  In an AP-CNBC poll, taken just before it became a publicly traded company, only 13% of the respondents trusted Facebook with their information.  56% didn't click on any of the advertising being presented; and, if fact, its advertising revenues have fallen.  46% said they thought that Facebook was a passing fancy and would ultimately lose to other competitors.

On top of all that, only 51% approved of or liked Facebook.  While, of that same group, 71% said they liked Google. Only 36% of those polled said they had a favorable view of Mark Zuckerberg, Facebook's founder.  Then, too, only 18% thought that the baby-faced and somewhat weird, Zuckerberg, was even qualified to run the company.

In the past, people have been P.O.'ed at Facebook because of privacy issues.  Even today, you have to wade through one clicked page after clicked page to block the whole world from seeing what you would prefer not be seen.  With Facebook, full frontal nudity is the norm and you have to work hard at putting your clothes back on and becoming a somewhat private person again.  All the hype was just a bunch of snake oil sales advertising and the sliding price of the stock is valid proof of that.

Click here to see the AP-CNBC polling data or go to http://www.cnbc.com/id/47391504/AP_CNBC_Facebook_IPO_Poll_Complete_Results_Analysis

Update:  Contrary to above, Facebook finished the day up $1.37 at $29.59 due to late-day buying; gaining almost a buck in the last 10 minutes of trading.  Did some actually catch the falling knife?

Update (a day later): Apparently, yesterday's late-day buying was just a short-covering rally.  As of today, Facebook has returned to its losing ways and has been down as much as $2 from yesterday's gains.