The ubiquitous social cynosure will close lower on its first day of trading, despite the hoopla. The shares may rise from there, but the initial direction will be down.
Here’s why: People want to invest in other people’s work and ingenuity, not in their own frivolity, which deep down they know to be just that–frivolity. The value of Facebook is predicated entirely on the (enticingly huge) number of people who engage it, rather than on–with Apple, for example–something it makes. “I love chicken” read a recent FB post in its entiriety. That’s a difficult product to sell to equity markets.