Facebook transitioned from the proverbial dorm-room start-up to a “business” some years ago. But as of last Friday, it must now be one, and not act like one.
The NASDAQ cock-up on the morning of the FB IPO ended up diverting attention away from serious lapses in Facebook’s management aptitude. Morgan Stanley was another scapegoat, eviscerated for the 11th-hour bump in share allotment and offer price.
But a seasoned team of executives wouldn’t have let it happen.
Friday’s claim that the IPO was “priced to perfection” was shattered on Monday, as FB fell quickly to $34. And stayed there for the next seven hours.
No, this is no longer about NASDAQ or Morgan Stanley. This is about the credibility of Facebook as a “real” business. And very soon, we believe, investors will sniff out the stinky fish smell. At the head.
Facebook will not be a successful publicly owned business with Mark Zuckerberg as CEO. His many talents do not appear to have any promise for turning around five straight quarters of decelerating sales growth.
Add to that a forward-earnings P/E of somewhere between 80 and 100, and a just-turned 28-year-old has more than met his match.
Take a look at the Facebook “Management” page, and see how confident those three little bios make you feel.
One of those bios belongs to Sheryl Sandberg, who as COO is supposed to play the role of “the real business CEO.” She was an opportunistic hire by Zuckerberg (a pattern that has repeated itself time and again – see Instagram). Her commercial background derives solely from eight years at Google.
She is no Terry Semel. Ring a bell? He was the “seasoned exec” Yahoo brought in to be CEO in early 2001 (albeit, a full five years after going public).
Sandberg is also no Eric Schmidt. Ring a bell? He was the “seasoned exec” Google brought in to be CEO in early 2001 (three years before the company went public).
Bringing in an “adult” to be CEO is an absolute and immediate requirement to solve for Facebook’s spiral downward in business credibility.
A CEO who wears the same clothes every day, especially at a $100-billion IPO, has a touch of mental illness. That in itself ought to be enough to get the CEO-recruiting pipeline stocked up.
He has taken a thrashing for it, but Geraldo was right – it’s not safe for young guys to wear hoodies. Especially rich ones.