How do we explain the two contradictory headlines about Facebook's IPO this morning? From Reuters, we get "Facebook's IPO already oversubscribed: source"; and from Bloomberg comes, Facebook IPO Said to Get Weaker-Than-Forecast Demand." Can both really be true? There's something about this IPO that has brought with it a particularly intense nitpicking. Perhaps it's the huge valuation Facebook is expected to get? Or the celebrity surrounding Mark Zuckerberg and his dorm room project-turned-world-changing website? But we're getting every detail of this thing in a way we haven't seen with other tech IPOs over the last year.
These two headlines seem like they get at the exact opposite thing. The first provides a sunny version of what's going on: "Despite concerns about slowing growth, a lofty valuation and signs the company is having trouble ramping up revenue from mobile advertising, institutional investors have so far indicated demand for more shares than Facebook has available, the source told Reuters," write Alexei Oreskovic and Olivia Oran. Whereas the second gives a gloomier take. "Facebook Inc. (FB)’s initial public offering has so far generated lower-than-expected demand from institutional investors who are concerned about the company’s growth prospects, people with knowledge of the matter said," write Serena Saitto, Jeffrey McCracken and Zijing Wu. An Anonymous source claims people are dying to get their hands on the stock versus an analyst saying it's overvalued. Boiled down, they really say the exact same thing: Someone thinks something about Facebook; No one knows anything.
This kind of coverage is a result of our curiosity about Facebook's IPO, as it's expected to be the biggest valuation since Google. We're not just seeing a lot of analyst speak. (Though, there's a lot of that.) We also got articles about Zuckerberg's bathroom breaks as well as his fashion sense. IPO coverage isn't unique to Facebook. But, when Groupon and Zynga -- two other high profile tech sensations this year -- we didn't read anything about the Groupon CEOs demeanor or breathless speculation about the gaming company. People talked about pricing and possibilities. But most of the coverage was reserved for the post IPO moment -- the real test. (Which Groupon failed.) Facebook is on another level.
We suspect it has something to do with Zuckerberg's celebrity. He had a movie made out of him -- we feel like we know him. And, we admit, it is fun to write silly posts about his magic hoodie. But, this goes beyond Zuckerberg. The world has big expectations for Facebook. Once it hits the market, it will say something about this possible tech bubble. It also confirms we've entered a new digital era, where social networking is a real something. And once it goes public we'll get to see how this real something, with a precarious business plan and intangible product, holds up as a public company next to its tech company elders, like Apple and Google, which have very different products.
But, until that actually happens, most of the "news" can only involve expectations and analyst opinions, meaning will probably see a whole host of contradictory write-ups about who is buying what and why. The road show, which began last Monday will get another week to prove itself and only then will we know how many shares at what price Facebook sold. Until then, we can look forward to more "analysis." Get excited.