Facebook's stock -- the largest IPO in history, and without doubt the most hyped and histrionically heralded -- is now half the size of its debut. Just about everyone has an opinion about what happened and what's next, and we've heard them all.
Well, almost all. We haven't heard what Mark Zuckerberg has to say.
As far as I can find, he hasn't given a single interview on the subject. He's spoken about it internally, as the Wall Street Journal reported, and has moved from reluctance to talk about the price, to an acknowledgment that it's "painful" to watch. He's expressed sympathy for employees who were counting on their equity. But that's it.
I find it exasperating and even cowardly that he has been so publicly invisible about what's been happening, about the way his baby has been treated in the public market. After all, Zuckerberg has made it clear from the outset that Facebook isn't your ordinary company with a purely financial mission. The first sentence of his letter to potential shareholders make it clear that this is a sui generis organization:
"Facebook was not originally created to be a company. It was built to accomplish a social mission -- to make the world more open and connected."
Doesn't this social mission also involve a social obligation?
His own words compel him to discuss -- openly and with full candor -- the stock collapse, his view of where Wall Street isn't getting his story and what Facebook's disappointing revenue numbers mean for his vision of the company as an engine for social change.
Read in today's context, every corporate value that Zuckerberg reels off in the letter are arguments for him to emerge from hiding. They include "Move Fast," "Be Bold" and "Be Open." In other words, move fast to address Wall Street's lack of confidence in your stock. Be bold in willingness to recognize the situation and be open in the way you discuss it. None of this has happened. It's not enough to ring the bell on the day of your IPO; you need to answer the charges of those who say that the bell is now tolling for you.
Most importantly, perhaps, Zuckerberg's letter articulates a philosophy which argues that profits can emerge from socially responsible behaviors. (That's a particularly ironic perspective today given how Ayn Rand -- the anti-Zuckerberg -- has once again been brought back into the conversation by Paul Ryan's nomination.)
He makes it abundantly clear that profits follow mission:
We've always cared primarily about our social mission, the services we're building and the people who use them. This is a different approach for a public company to take, so I want to explain why I think it works... Simply put: we don't build services to make money; we make money to build better services.
This argument has been shaken, if it is not in shambles, and Zuckerberg needs to be visible in its defense. Not only that, he also needs to be visible in his own defense. He needs to show poise, maturity and a well-articulated strategy for growing revenue. There's a growing argument that Zuckerberg should step down as CEO -- that he's "in over his hoodie." Gigaom nicely summarizes the Mark-Must-Go debate.
Another subject that Zuckerberg needs to address is the Peter Thiel bail-out. Thiel, a member of Facebook's board and the company's first investor, dumped almost all his holdings -- 270 million shares -- as soon as the lock-up permitted. To be fair, Thiel committed to do this before the stock skid; he arranged for the dumpage on the day of the IPO -- regardless of the stock price. But that story hasn't been told. The media has spun Thiel's sale as a vote of no confidence. That's another reason Zuckerberg needs to get out there. Fast.
Think about it. The founder and CEO of a company that encourages more than 900 million users to share every detail of what goes on in their minds, is unwilling to share what's going on in his. I'm asking for Zuckerberg to act on the very ideology he describes as being core to Facebook:
"People sharing more -- even if just with their close friends or families -- creates a more open culture and leads to a better understanding of the lives and perspectives of others."
Mark Zuckerberg is dangerously late in entering the conversation about Facebook's future
It's time, Mark. Let the Sunday morning shows know that you're ready and willing to talk about Facebook and you'll instantly become a member of the elite Full Ginsburg club. It's fine if you wear your hoodie, as long as you unhood your analysis. You have an obligation as not just founder and CEO, but someone who maintains control over the company to begin the conversation. Back to your letter:
We're going public for our employees and our investors. We made a commitment to them when we gave them equity that we'd work hard to make it worth a lot and make it liquid, and this IPO is fulfilling our commitment. As we become a public company, we're making a similar commitment to our new investors and we will work just as hard to fulfill it.
There are just too many open questions about your ability to deliver on that promise for you to remain silent about it. It's also the smart thing to do for your valuation and future. You need to rally your users. There's a meme already out there about Facebook fatigue. Just about everyone on Facebook is well aware of what's happened to the stock price. That debacle has to unconsciously rewire -- to use one of your favorite words -- their perception of the Facebook brand.
Imagine if we start to see the exodus from the platform that skeptics have been forecasting. Even the intimations of an emerging "Zuck you" would be catastrophic.
Follow Adam Hanft on Twitter: www.twitter.com/hanft
The "social mission" message was simply intended to be a guide-post for you, the Facebook participant, to "act out." The more that you see yourself as "open and connected" and Facebook as the means of being so, the more open and candid you are likely to be in the "privacy" of a gigantic aircraft hangar ... with thousands of electronic tape-recorders capturing and analyzing every word.
Facebook, the public company, exists for the same reason each and every corporation exists: to make profits for its shareholders (heh...) by engaging in its fundamental business activity: targeted advertising. Audience participation not only does not bring in any revenue, and that audience's visceral reaction to the very notion of paying even one thin dime for it compelled the company to say, "Free, and Always Will Be."
Zuckerberg isn't saying anything, because there is nothing to say. His company is no Apple and he is no Steve Jobs; no Bill Gates; no Larry Ellison; no Sir Richard Branson. His company is living on borrowed money that eventually will be pulled, leaving him with nothing but a fair amount of cash and a forgotten hoodie.
Really? The analysts and investment banks have as much integrity as Madoff did. This stock is unfortunately one that was so over-hyped by the greedy pre ipo investors.
The only losers? the public, and some employees. The winners? Insiders, bankers, Zuck.
"Business is Fundamentals." If you don't have those, you don't have a business. Period.
Sure, Facebook hasn't figured out how to make money by advertising on mobile devices, while advertisers have figured out how to advertise on Facebook without paying. But in the short term, it doesn't matter that Facebook hasn't ironed out their business model, because the public wrote them a check for $16B with hardly any strings attached.
In the long run, I doubt that Facebook will be able to run a profitable advertising business. But analysts seem to be under the impression that the IPO has put them under pressure to adapt and grow their business on a compressed schedule, whereas it seems to me that the IPO bought them quite a bit of time.
It seems to me that Facebook knew that their business model was turning sour and that they needed time and money to change directions. The IPO bought them time and money. But don't expect a miraculous turnaround in the next 12 months.