Clownishness, much like beauty, stands in the eye of the beholder. So let's gather together to behold a clownish trade. Granted: playing Monday Morning quarterback to lame stock trades is a bit selective, even venal. But in the end, you learn from analyzing mistakes. Plus, what's more fun than making fun of missteps and pratfalls? With all that said, welcome to the next installment of The Clownish Trade of the Day…
If one clown got out of his car, stepping on your foot with his big shoes, don't you think another will follow? After Bozo No. 1 crushes your pinkie toe, wouldn't you pull back your foot before Bozo No. 2 does his thing on your great toe?
Facebook (FB) went into Memorial Day Weekend as the butt of jokes (humor is the tragedy plus a botched stock offering, right?), yet on Friday Znyga (ZNGA), the Farmville folks closely aligned with Facebook in the social media realm and as a frothy IPO, managed to circumvent reality and common sense to hold its own.
It went into the weekend on a stable note, even ending on a slight upswing, as Facebook suffered another in a series of down days.
That's a joke. A stock on an acquisition binge of undetermined quality, closely aligned with a company that is currently engaged in active combat with the court of public opinion, should never veer away from its larger, more prominent association-especially not in the prelude to a long weekend. Sure enough, the market opened Monday and Znyga turned into an instant washrag.
To mix metaphors from the circus to dish towels even further-all the way to river beds-it may be rough justice, but if you are swimming while tied to a rock, you are eventually going to be a lifeless trope no matter your skill level.
There are plenty of stock market aphorisms, the majority of dubious quality and zero utility. But the one that makes most sense is this: don't fight the tape. Certain shifts in sentiment merely have to be allowed to run their course. That goes for the company in the direct sites of the sentiment shift and any even loosely associated with it.
Facebook has clearly hit a stock market funny bone. That might fluster Znyga traders, but don't make any reckless judgments to stand fast, especially going into a vacation. Just play along and stand down.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.