GeekWire helps dissect Facebook’s Wall Street debut

Facebook may be one of the most talked about IPOs in
years, but that doesn’t mean it’s a good buy.

Todd Bishop and John Cook, of GeekWire,
talked to a
mergers and acquisitions expert who kept on eye on FB
during its market debut Friday.

“We just came off the worst day in markets in terms of
trading, and in spite that, Facebook was able to pull off
a public offering and it’s one of the biggest ever,” said
Matt Burgess, president of the Quorum Group.

Facebook ended up closing at $38.23, a gain of 23 cents,
or 0.61 percent. About 570 million shares were traded on
its first day as a public company.

Casual players in the market may not have been thrilled
with a 23 cent gain, but Burgess said it’s not easy to
pinpoint why it didn’t close higher.

“Maybe that’s due to the horrible (market) performance all
week, but I think a lot of investors are wondering what
the future is going to look like (for Facebook).”

Burgess isn’t a shareholder himself, but said he probably
would have been selling on Friday. He thinks a lot of
people want to believe Facebook is like Google and that
could really hurt them in the end.

“The don’t know how to monetize their traffic, really.
Right now, they’re generating revenue, but it’s not
sustainable long term.”

Burgess believes Facebook is less about buying something
and more about finding out what your friends and family
are up to. Unlike Facebook, Google will help you find and
buy a product. Amazon will help you make decisions about a
product and then let you make a purchase. While Facebook
certainly eats up people’s time and energy, there’s no
clear way to monetize a user’s activity.

“The theory is Facebook will magically figure out how to
turn all those ‘likes’ into commerce and revenue, but they
haven’t yet,” said Burgess.” If they don’t, they’ll be a
nice, big company, but not Google.”

Burgess thought it interesting Facebook would double down
with the aquisition of Instagram since it was already a
big player in photo sharing, sort of by accident. He
speculates the next frontier might be video because there
isn’t a great way to record something on your phone, make
some edits, and post to your wall.

“As an M&A guy, I’m thinking ‘Who is Facebook going to buy
to solve that problem?'” He doesn’t know yet.

As for CEO Mark Zuckerberg, Burgess said as long as he can
maintain control and make good decisions, he’ll be OK,
even if he is wearing hoodies to his meetings.

However, it’s quite possible he could fall to the
pressures of Wall Street’s reliance on quarterly earnings
reports.

“If that thing drops to $20 in six months, Zuckerberg, no
matter (what) he says about long term monetizing the
‘likes’ on Facebook, he’ll be out of a job,” Burgess said.