How Facebook Threatens the Legitimacy of the Stock Market

Facebook banked $16 billion on its initial public offering, so why are market analysts disappointed? Perhaps because the company threatens the dominance of the stock market itself. 

What's the Latest Development?


With Facebook's shares trading well below their initial value one day after the company went public, just who is to "blame" for what has gone "wrong"? Some say the company's banker, Morgan Stanley, diluted the potency of the stock by allowing a whopping 421.2 million shares to be sold. Others, like James Surowiecki, say Facebook's creative accounting may have dampened investor interest. In the past, becoming a publicly traded company has meant giving more decision making power to investors. But Facebook's two-tiered share system left CEO Mark Zuckerberg with control over 57% of the voting shares while owning just 18% of the company. In other words, Facebook is still entirely his show. 

What's the Big Idea?

Ever since it was clear that Facebook would become a publicly traded company, Zuckerberg has been candid about not ceding his vision to investors (wearing a hoody to his Nasdaq meeting helped emphasize that). In today's market, says Surowiecki, investors are more short-sited than ever, verging on manic-depressive, measuring the value of a company by its monthly profits rather than yearly performance. As a result, the number of public companies in the US has dropped by 40% since 1997. This means power is returning to companies' managers and CEOs, and that the stock market is losing its status as the center of American capitalism. 

Photo credit: Shutterstock.com

Why a federal judge ordered White House to restore Jim Acosta's press badge

A federal judge ruled that the Trump administration likely violated the reporter's Fifth Amendment rights when it stripped his press credentials earlier this month.

WASHINGTON, DC - NOVEMBER 16: CNN chief White House correspondent Jim Acosta (R) returns to the White House with CNN Washington bureau chief Sam Feist after Federal judge Timothy J. Kelly ordered the White House to reinstate his press pass November 16, 2018 in Washington, DC. CNN has filed a lawsuit against the White House after Acosta's press pass was revoked after a dispute involving a news conference last week. (Photo by Alex Wong/Getty Images)
Politics & Current Affairs
  • Acosta will be allowed to return to the White House on Friday.
  • The judge described the ruling as narrow, and didn't rule one way or the other on violations of the First Amendment.
  • The case is still open, and the administration may choose to appeal the ruling.
Keep reading Show less

How to split the USA into two countries: Red and Blue

Progressive America would be half as big, but twice as populated as its conservative twin.

Image: Dicken Schrader
Strange Maps
  • America's two political tribes have consolidated into 'red' and 'blue' nations, with seemingly irreconcilable differences.
  • Perhaps the best way to stop the infighting is to go for a divorce and give the two nations a country each
  • Based on the UN's partition plan for Israel/Palestine, this proposal provides territorial contiguity and sea access to both 'red' and 'blue' America
Keep reading Show less

Water may be an inevitable result of the process that forms rocky planets

New research identifies an unexpected source for some of earth's water.

Surprising Science
  • A lot of Earth's water is asteroidal in origin, but some of it may come from dissolved solar nebula gas.
  • Our planet hides majority of its water inside: two oceans in the mantle and 4–5 in the core.
  • New reason to suspect that water is abundant throughout the universe.
Keep reading Show less