Zuckerberg Swings And Misses: Could Facebook Still Hit A Home Run?

May.24.12 | About: Facebook (FB)

by Charles Biderman

By now there is no question that the Facebook (NASDAQ:FB) IPO was totally screwed up. Not only was just about every aspect of the deal FUBARed, but the overall size of the deal-- $18 billion-- magnified the mess. Yes, Nasdaq and Morgan Stanley (NYSE:MS) both did a horrible job. But ultimately the blame for the disaster is solely on Facebook's 27 year old CEO, Mark Zuckerberg. All final decisions regarding each aspect of the IPO had to be made by Zuckerberg. That is what CEOs do.

I should know-- over the last 40 years in my career I personally have met or talked with over a hundred public company CEOs. What I have learned from my experience is that every company is only as good as the CEO. So, going forward, ultimately Facebook will only be as good as is Mark Zuckerberg.

Before the IPO was priced, I was planning to buy a small amount after the offering and expected to hold it over time. I thought then, and still do, that Facebook has the potential of becoming a huge financial success-- the key word being potential. Even though I gave Mark Zuckerberg strike one for how he handled the IPO, I did buy a few FB shares Monday and Tuesday. If there is a strike two, I will sell my shares. On the other hand, if Zuckerberg becomes a hitting machine, I will buy more.

There is no question that Mark Zuckerberg did a brilliant unique job in bringing Facebook to life. Facebook has almost a billion members and supposedly five percent are online each and every day. That is a huge already existing franchise. Wall Street is pricing the value of that franchise at $80 $90 billion.

That is where we are right now. Is Facebook the most glamorous or most exciting new web idea today? Of course not. But there is that huge and still growing franchise: Remember Facebook is the largest congregation of humans in any one arena ever.

The most important question to me in determining if Facebook will be a strikeout or a home run: Was the IPO the end of the game for Zuckerberg or was it the beginning? Was the real end game cashing out billions by 27 and then getting married? Or is the real end game for Zuckerberg creating the most valuable company ever in terms of market cap? Time will tell how Zuckerberg answers.

Disclosure: Long FB.