Wall Street Blew It: The Real Tragedy of the FB IPO
Wall Street brings many new companies to the investing public every year -- but Facebook is no ordinary company. With 900 million users, Facebook is the application of the masses, used to connect the 99 Percent and organize the protesters for "Occupy Wall Street," the Chinese dissident community and the Arab Spring.
This was a company that everyone thought they understood, and the prospect of getting in on the ground floor, of owning a piece of the next Apple(AAPL) or Amazon(AMZN) or Google(GOOG) , excited the interest of the retail investor in a way that few other stocks will ever have the opportunity to do.
And Wall Street needed to respect that opportunity. The gains that have been achieved in the stock market since 2008 have largely been without the participation of the retail investor -- that middle-class worker who used to save an extra $20 or $100 or $500 a week to invest in stocks. But that crucial customer to Wall Street has gone unrewarded in the last 10 years -- the so-called "lost decade" -- as stock indices have gone nowhere, while corrupt bank executives and institutional investors have managed to protect their wealth and prosper through the backstop of the U.S. Treasury.
And retail investors have, not surprisingly, abandoned the stock market, moving their money into savings accounts and bond funds and annuities. They have had all their suspicions confirmed in the last four years that the stock market is a "rigged" game and have largely refused to play anymore -- even though they must engage in stocks at some point again in order to finance their kids' educations and their own retirements.