The IPO from hell

Some say Facebook shouldn’t have gone public. The company didn’t need the cash. Founder and CEO Mark Zuckerberg obviously doesn’t crave having the public as his partner. He made a point of concentrating power in his own hands through the kind of voting rights lockup that corporate governance mavens think should be illegal.

These gripes are misplaced. The market is fully capable of putting a price on the varieties of corporate governance. And Mr. Zuckerberg bent over backwards to make sure public shareholders knew what they were getting into. That said, the rocky start to Facebook trading accurately foreshadows what was always going to be a stressful relationship between Mr. Zuckerberg and his public investors. How convenient at least to be able to blame Nasdaq for a messy wedding night. …

It’s clear Mr. Zuckerberg was eager to indulge the public’s readiness to attribute a $100 billion market value to the firm. He liked the idea of Facebook’s stratospheric valuation relative to any demonstrated ability to generate revenues or profits. He reportedly pushed Morgan Stanley to raise the issue price. But far from clear is whether he’s willing now to accept the public investors’ agenda and protect their money by shifting his focus to profit making.