The Facebook IPO shows…

The performance of the Facebook IPO suggests there is a gap between the cultural understanding of what is valuable and the economic ability to evaluate (or account for) this cultural capital. This gap will be difficult to overcome.

The so-called Facebook flop is more a sign of Wall Street’s issues (overhype, pseudo-corruption, etc) than any lack of assets on Facebook’s part. To invest in Facebook as a stock market investor is to miss the point anyway; Zuckerberg has always been clear about this. Instead, Facebook’s value is as an intangible asset that emphasizes, or gives a platform for, the user’s own tangible contribution. If investors want to successfully inflate the stock price of Facebook they will need access to a believable mathematical formula showing, or “showing,” the tangible impact of Facebook’s intangibles on either systemic, or industry, or individual value.

In the meantime, users will maintain their own understanding of the value of Facebook. At this point, it appears the only currently demonstrably valuable way to invest in Facebook is through the time taken to use its free features — to develop your brand as a cultural standpoint. Problem for Facebook is, Twitter provides this service maybe better.

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This entry was posted in accounting, Facebook, intangible assets, intellectual property, prices, the price mechanism. Bookmark the permalink.

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