Facebook lost around 11% of its value on a single day after it went public. This is probably reflecting concerns on monetization of its consumer base - a long anticipated problem (that actually should only raise eyebrows on why to additional shares at the high-end of the price range). And a problem that is still not exclusive of Facebook - most of the big digital and social companies are still struggling to ensure revenues that match its consumer base (we are talking about names as Twitter, Pinterest,...). That is why I always talked about a possible bubble looming in these area of trade. Warren Buffett once said that you shouldn't invest in a company with a business model that you don't understand how to it is making money - a very good warning that if nobody knows how the company is making money, then, probably, share price gains are being made through speculation. Which is not good...
It will be interesting to follow Facebook over the next few months and understand market trust on the company. But let me disclose it to you - yes, there is a share price that will make me buy Facebook shares... (I will just not tell you which).
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