Even as the stock market pounds Facebook's freshly issued shares, analysts and techies are still defending the newest public company. After Friday's debacle, which was in part caused by technical glitches, which Nasdaq says it has now fixed, the Facebook sympathizers told us to wait. Day one wouldn't tell the whole story. But Facebook's second day on the market hasn't eased our fears that we're in a social media bubble. In fact, it only suggests the bubble is coming to its end.

At this very moment, the stock is trading at around $34, down about 11 percent from its already IPO price of $38. Even with those numbers, apologists like Business Insider's Nicholas Carlson are still backing the stock and the company.


These demonstrate the two lines of thinking that have justified this big drop. Facebook is still a huge company that has made a lot of people very rich. And this dive is actually, in some ways, good for Facebook -- just wait, they say, it will get better. Neither of these explanations quite explain how Facebook will recover. And while this reasoning has a whole lot to say about Facebook and its billionaires, what about the rest of the social media bubble?

To that first point, yes, Facebook's rich. Even at these prices, Facebook's still big and its millionaires are still millionaires. But, as we've noted, that doesn't help anyone but Facebook. Or, really, anyone but Mark Zuckerberg, as James Surowiecki explains in his New Yorker column this week. This is a selfish social media bubble. TechCrunch's Alexander Haislip reiterated this point quite well over the weekend. "Facebook’s rise is great for Zuck, but unless you’re among a privileged few, it isn’t good for you," he wrote, explaining that the social network doesn't add much to the economy -- a point we've made before. From Haislip:

The wealth created by Facebook gets concentrated into the hands of a few—some of whom have refused to pay taxes on their gains—instead of being recycled into the greater economy. And the computer makers that supply Facebook rely on components imported from other countries, sending capital abroad and weakening our balance of trade.

And with the stock going the way it is, not only will the rest of the economy miss out on the benefits of a bubble, but other social media companies will miss out, too. Facebook's big IPO debut was supposed to further hype social media as a thing in which to invest. When Facebook got its big valuation, the stock market was supposed to eat up anything "social media." Facebook's thud just ruined those chances for everyone else. We saw how Facebook's stock effected Zynga on Friday. Even if Facebook recovers and goes on to be the next Apple of the stock market, the rest of the social media world won't.

But, it's not even clear Facebook will recover. See, there's another selfish thing about the social network: It doesn't add much of anything to the world. Facebook claims its mission is to connect people. But, as Haislip notes (and as The Atlantic's Alexis Madrigal noted before him), boiled down, it just sells advertising.

Facebook sells advertising—it may be the most effective advertising platform since Google, or not—but that’s not the best use of the brightest minds of our generation. Advertising doesn’t improve our balance of trade. It doesn’t lift people out of poverty. It doesn’t employ the modestly skilled. It doesn’t extend life expectancies or take away pain. It doesn’t improve our standard of living.

And, that one thing it's good at, it doesn't do very well. "The problem with Facebook and other social media is that they were not designed to carry advertising," writes Ad Age's Rance Crain, explaining that businesses don't see Facebook's utility in ad buys. General Motors, for example, pulled its $10 million ad campaign because it didn't really see Facebook as an advertising platform. "We've found Facebook ads to be very effective when strategically combined with engagement, great content and innovative ways of storytelling, rather than treating them as a straight advertising buy," Ford said in a statement. Advertising is Facebook's business model, according to its S1, that's how it plans on growing and making money.

And then there's that second point, which is basically a "just you wait" mentality, with people finding justifications for today's fall while simultaneously predicting a future rise. We can find other reasons, besides Facebook's lack of intrinsic value, that the stock has taken a dive. As Gizmodo's Brian Barrett notes, those Morgan Stanley analysts couldn't hold up the stock price forever. Today we're just seeing a leveling off that would have happened on Friday, if those bankers had not intervened. Epicurean Dealmaker, a finance blogger, also reminds that the stock still needs to level off, in the following tweet. "Short answer: the price action in Facebook Friday and today DOES NOT REPRESENT TRUE MARKET DEMAND." Dan Scholnick, an investor at Trinity Partners, explains over at TechCrunch that a low IPO means good things for Facebook, ending with this lesson: "The best investments are determined over months and years, not hours and days." AllThingsD's Mike Issac has a similar sentiment at the end of his post describing the stock free-fall.

Here’s the thing: Like Benchmark Capital’s Bill Gurley reminds, Amazon’s debut saw the stock break issue and stay below its IPO price for months.

It then went on — over the long haul — to rise 1000x.

Amazon, too, came of age during tech bubble 1.0 and has since recovered, it's true. But, Amazon sells real things -- it has a business model that works. All of the above reasoning explains why the stock is tanking, from a financial, market perspective. We don't see anything in there about recovery. And, even if Facebook pulls an Amazon, the rest of the social media world has already lost its opportunity.

Update 4:20 p.m.: Facebook continued trading well-below the $38 mark throughout the day, closing at the day at $34.03 a 10.99 percent drop for the day. Some are calling it a leveling off, others say we should expect it to keep falling. Zynga also ended the day a bit down. Though, other social media stocks, Groupon and Yelp did fine -- for today.