Market Roundup: The Japan Experiment and Facebook Inc (FB)

That is, in fact, a perfectly rational response. Shareholders lamenting their losses ought really to take a harder look in the mirror to find the culprit: No one could have been unaware that Facebook Inc (NASDAQ:FB)’s IPO was one of the most overhyped flotations in the history of the U.S. stock market. The signs of speculative excess were everywhere.

A company’s management does not control its stock price; instead, it should focus on building long-term value. If they are successful, the stock price ought to take care of itself over time. Where Zuckerberg et al are vulnerable to legitimate criticism is whether or not their fundamental strategy is right. Does it matter, for example that the number of per-user ‘likes” and comments has increased in the past year, as Zuckerberg noted? Given Facebook Inc (NASDAQ:FB)’s current business model, it’s not at all clear that engagement translates directly into profits.

The article Market Roundup: The Japan Experiment and Facebook originally appeared on Fool.com.

Fool contributor Alex Dumortier, CFA has no position in any stocks mentioned — you can follow him on LinkedIn. The Motley Fool recommends and owns shares of Facebook Inc (NASDAQ:FB).

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