Why I Dumped My Facebook IPO Shares at the Open Today


 Facebook Shares

In a final, epic victory of reason over complete and utter pandemonium, I dumped my Facebook IPO shares at the open today.

This may come as a surprise to some, given that I wrote a pretty bullish case about the future of Facebook just yesterday, which in itself was probably surprising given that on Tuesday we published research that basically said Facebook advertising is awful.

So why did this confused and conflicted internet marketer sell shares of The Social Network?

As in PPC management, buy and hold is for suckers

While I still strongly believe everything I wrote about the long-term future of the company, timing still matters and it’s going to take a couple of quarters (or years even) for FB to figure out how to monetize its audience.

Damn it, Jim, I’m a marketer, not a financial analyst

I have no clue if Facebook is a good investment or not. And really, you shouldn’t trust a marketer for advice on stock valuations. The one thing I’m sure of is that Facebook’s advertising options are a big disappointment (for now), particularly for small and medium-sized businesses.

I Have Real Work To Do

Last night, as I was collecting clippings of all the press coverage that our Facebook vs. Google Display Network Study generated this week, I got the sense that Facebook felt less like an investment and more like a lottery ticket. As the founder and CTO of WordStream, I’m busy developing new features for WordStream Advisor, the AdWords Grader, and the 20-Minute PPC Work Week, etc. Given the extreme volatility, it dawned on me that I ought to get off this roller coaster and instead focus my time on the work at hand.

So yes, It’s been quite an exciting week. And I fully admit it: I’m the financial equivalent of a flip-flopper. I bought into the Facebook IPO hype, and then sold out. And, who knows, maybe I’ll buy it back later!

P.S. While you're waiting for Facebook to figure out its advertising model, why not give Google advertising a try?

P.P.S. Sorry for all the Facebook content this week. Next week, we will return to our regularly scheduled programming.

Hit me up on Twitter

Find out how you're REALLY doing in AdWords!

Watch the video below on our Free AdWords Grader:

Visit the AdWords Grader.


Will E.
May 18, 2012

Epic series of posts, Larry!

May 18, 2012

LOLFarceBook. Interesting blogs though.

Andreas Moser
May 19, 2012

I warned you not to buy any Facebook shares: http://andreasmoser.wordpress.com/2012/05/18/dont-buy-facebook-shares/ ! Hopefully you guys listened to my advice.

Richard Kraneis
May 21, 2012

Larry,Ultimately our best investment is staying with our core objectives and doing primary tasks every day.Your decision sounds very wise to me.Richard

May 21, 2012

I think that Facebook's potential as a company is nearly unlimited, but as a short term move I see no problem with any investor deciding to dump the stock for a short term gain. There were a lot of attempts at hit pieces of Facebook last week (GM dumping FB ads for example) that the press ran wild with and the stock is going to fluctuate as retail investors take a hit. The reality is that nothing online is a threat to Facebook's dominance right now so they can bide their time and work on their features in secret til they're ready. Social networking isn't the endgame of Facebook, it's  search, ecommerce, payments, entertainment, platforms, identity services, and others as well. Look at how much social data that Facebook has access to that nobody else in the world has access to. And if you think that Facebook can't compete with somebody like Google in search, just look at how much attention they've captured from businesses already - big brands are promoting Facebook URLs in their television advertisements, there's a plethora of companies listed at http://www.buyfacebookfansreviews.com that do nothing other than promote Facebook business pages, and Facebook is nearing a billion active users. This would not be happening if Facebook wasn't completely dominant in what they are doing. As further proof of this, look at how much effort Google is putting into trying to get Google+ jumpstarted in a hurry. They know that this has to happen soon because if Facebook includes a real search feature within Facebook, then a big part of the reason to use Google search will be gone and that has to be a long-term problem for them. The key though is to get back on board with Facebook before they release their new wave of features. People generally like and respect Google, but if Facebook releases a search feature that is worth a damn, I think its basically game over for Google's dominance online. 

Allison Wax
May 22, 2012

I, for one, think you made a wise decision to get out when you did! Did you make any profit on the transaction? Or was it a loss?

May 30, 2012

Dont know what to say now as everything seems to be in your favor...but definitely that was a brave and intelligent move.

Leave a comment