It would be all too easy to say that Facebook’s market meltdown is coming to an end. After all, Mark Zuckerberg’s social

network burned as much as $ 50 billion of shareholders’ wealth in just a couple months. To put that in context, since its debut(初次登台) on NASDAQ in May, Facebook has lost value nearly equal to Yahoo, AOL, Zynga, Yelp, Pandora, Open Table,

Group on, LinkedIn, and Angie's List combined, plus that of the bulk of the publicly traded newspaper industry:

     As shocking as this utter failure may be to the nearly 1 billion faithful Facebook users around the world, it’s no surprise to

anyone who read the initial public offering (IPO) prospectus (首次公开募股说明书). Worse still, all the crises that emerged

when the company debuted-overpriced shares, poor corporate governance, huge challenges to the core business, and a

damaged brand-remain today. Facebook looks like a prime example of what Wall Street calls a falling knife-that is, one that

can cost investors their fingers if they try to catch it.

      Start with the valuation. To justify a stock price close to the lower end of the projected range in the IPO, say $ 28 a share, Facebook’s future growth would have needed to match that of Google seven years earlier. That would have required

increasing revenue by some 80 percent annually and maintaining high profit margins all the while.

      That’s not happening. In the first half of 2012, Facebook reported revenue of $ 2.24 billion, up 38 percent from the same

period in 2011. At the same time, the company’s costs surged to $ 2.6 billion in the six-month period.

      This so-so performance reflects the Achilles’ heel of Facebook’s business model, which the company clearly stated in a

list of risk factors associated with its IPO: it hasn’t yet figured out how to advertise effectively on mobile devices, The number

of Facebook users accessing the site on their phones surged by 67 percent to 543 million in the last quarter, or more than

half its customer base.

      Numbers are only part of the problem. The mounting pile of failure creates a negative feedback loop that threatens Facebook’s future in other ways. Indeed, the more Facebook’s disappointment in the market is catalogued, the worse Facebook’s image becomes. Not only does that threaten to rub off on users, it’s bad for recruitment and retention of talented hackers, who are the lifeblood of Zuckerberg’s creation.

       Yet the brilliant CEO can ignore the sadness and complaints of his shareholders thanks to the super-voting stock he

holds. This arrangement also was fully disclosed at the time of the offering. It’s a pity so few investors apparently bothered to do their homework.