We Continue to Bury the Big Facebook Stories

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NEW YORK (TheStreet) -- When I go on CNN I usually do it from the network's Los Angeles Bureau in Hollywood. I have come to know one of the security guards there, who routinely asks me what I'm "talking about today." Last week I told him Facebook .

That was just as the media -- financial and otherwise -- was gearing up to put on their $38 rally hats. The media tends to like purely symbolic stories.

When I write or go on television I make an attempt to provide something more than the obvious. Can I come up with a different take? A peek inside what I think is really going on. Something, at least, slightly more informative and, at most, better than everybody else has. Or something otherwise provocative or compelling.

Last week I was on CNN to discuss Facebook's impressive earnings report.

This week I wrote just one story about Facebook. The standard Facebook set to return to its IPO price of $38 just over a year since going public didn't move me. About 632 other people were writing that story anyway. So I wrote the story I think matters more: Can Facebook Become the Super Bowl For Advertisers?

It made me feel good that TechMeMe, the excellent curator of tech news, chose to highlight my piece in the midst of the $38 IPO-related hoopla. I presume they felt like I did -- the $38 talk was burying what should have been the lead.

There's something inherently more compelling about the prospects of Facebook offering advertisers a platform that rivals the Super Bowl -- every single day of the week -- than a run back to $38 quite a few people saw coming. This, not the stock price, gets at the power and potential of Facebook's business.

That said, if you're going to flashback to the IPO as the stock flirts with $38 and continues its recovery, you should be talking about that security guard. That's where the human drama exists. That's where there's meaning.

With relation to companies, psychological stock price barriers mean very little. In 2011, Netflix crossed the psychological hurdle of $300. Then look what happened. Apple took a similar route, knocking out $700 before imploding. That's what mattered. The inverse correlation between what would ultimately happen with the company and what was happening with the stock.

Aside from that it was all about the human drama associated with following and investing in these high-flying battleground stocks. Fortune's Philip Elmer-DeWitt did one of the best jobs capturing this emotion in his March 2013 story, The rise and fall of Andy Zaky, that chronicled how an AAPL-only hedge fund cost individual investors millions of dollars.

Facebook became one of the most textbook Peter Lynch stocks of all-time. Invest in what you know. And can you blame investors who felt like the Facebook IPO was the time for them to get into the stock market?

I don't think the security guard who put $1,000 into FB stock the first day it traded publicly represents random anecdote. In fact, I bet there are tens of thousands, maybe hundreds of thousands of people just like him. When he told me he put $1,000 in FB, I asked if he was still holding it. His reply, after a smirk and shrug, "Yeah. And I'm just waiting to see if I can break even!"

Folks threw lots of blame around after Facebook went public and the stock tanked. Make no mistake, people pointed fingers because the stock went down. There would have been less ruckus if the IPO fiasco happened alongside a rising stock.

I purchased one share of FB stock on the IPO, just to be part of the experience as I realized after the opening bell on May 18, 2012, what was going down. I think I bought my share at around $42.50, but, like so many other investors, my brokerage didn't send me a trade confirmation for hours. I had no idea where I was at with the trade. To me, it didn't matter. I was just conducting field research with one measly share. But it must have mattered to the security guard, teacher, barista, social worker, carpenter, florist, administrative assistant or flight attendant who put $1,000 or more on the line.

As it turns out the brokerages and NASDAQ, not Facebook, ended up dealing with the brunt of the fallout. Because Facebook did nothing wrong. As I pointed out in June of last year, the company clearly outlined the risks associated with its business in public documents filed ahead of the IPO. It's not Facebook's fault if investors and much of the media didn't heed the company's warnings that ad revenue could slow down as users make a rapid shift from the desktop to mobile. In fact, Facebook used the word "mobile" approximately 170 times in each of these public documents I speak of.

But I don't expect the individual investor with $1,000 who has never heard of Peter Lynch to know these things. In a perfect world, he or she would. But that's not reality. In my word, the media, particularly the financial media, needs to take some share of the responsibility.

Last year, before Facebook went public, most of the media spent more time on the spectacle of the IPO, not the risk section of the company's S-1. And here we are again more than one year later. The media's doing the same type of thing. They're hyper-focused on Facebook's flirtation with $38, but largely ignoring the meaty stories that actually matter.

--Written by Rocco Pendola in Santa Monica, Calif.

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