If You Bought Facebook Stock a Month Ago, You're Up 13% (But So What?)

By Alexis C. Madrigal

The stock moves up and down, the company remains.

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Because everyone was gleefully jumping on Facebook's grave as it slid 17 percent during its first month of trading, I just wanted to point out that the company's share price has been doing well.

This is not to prove that somehow Facebook's fortunes have changed a ton since the stock debuted. It's more to say that following the twitches of any company in the algorithmic froth of the equity markets is a recipe for getting embarrassed.

All those tough arguments about Facebook's problems are still relevant even if the stock is going up. All the boosterish arguments about Facebook's potential still could be realized even if the stock dives again.

I think appealing to recent share price moves is practically an appeal to authority, where the 'expert' is actually the stock market. The assumption built into that idea is that the market is evaluating companies on the same basis as users of or advertisers on Facebook. And they're not.

This article available online at:

http://www.theatlantic.com/technology/archive/2012/07/if-you-bought-facebook-stock-a-month-ago-youre-up-13-but-so-what/259736/