The Facebook Fiasco - How Greed & a Lack of PR Have Greatly Tarnished a Major Media Brand - Steve Blacker

By Legends & Leaders Archives
Cover image for  article: The Facebook Fiasco - How Greed & a Lack of PR Have Greatly Tarnished a Major Media Brand - Steve Blacker

1. One did not have to be a sophisticated or even slightly knowledgeable investment banker to realize that when FACEBOOK launched its public offering the price set was unrealistic and based on market hype versus future potential earnings. While Morgan Stanley chose to ignore its own analysts' warnings; FACEBOOK decided to get all they could from its own unrealistic market hype. The rumors of the stock shooting to 45 or higher were sad to say just rumors. The offering price of $38 a share was built upon the hope that a buying frenzy would ensue and no one would want to be left out of a supposed good thing.

2. The irony is that America's #1 social media brand has to date failed to communicate in any way with its members about their stock offering fiasco. The bad PR for FACEBOOK is not going to go away. A fifth-grader, Sam Lesser is still waiting to find out the status of his FACEBOOK investment. The 11 year old used all his savings; some $10,000 to purchase 300 shares. To date he is still waiting to find out the status of his order and he has filed a dispute to cancel his order. Rather than have this bad PR play out in the media shouldn't Mark Zuckerberg or some spokesman from FACBOOK offer to make the 11 year old whole again?

3. The obvious greed of both Morgan Stanley in ignoring its own analysts' projections of declining future earnings for FACEBOOK and FACEBOOK not questioning how Morgan Stanley could go with the highest offering price imaginable shows not a lack of knowledge but a total disregard for their own customers and members. Imagine how a FACEBOOK member must feel about FACEBOOK if they purchased or attempted to purchase the initial stock offering. Many FACEBOOK members who did so now either have major paper losses or orders that are in limbo. Up until now, a happy and satisfied FACEBOOK community has been FACEBOOKs biggest reason for its spectacular growth. In the past few days the FACEBOOK community's faith and trust in FACEBOOK has been damaged severely. This may greatly jeopardize FACEBOOKs current membership and make the brand less attractive to future potential members.

4. Mark Zuckerberg up until now seemed to have a great deal of empathy for his members and treated FACEBOOKs relationship with them in a sacrosanct manner. Zuckerberg was slow to accept advertising not wanting to alienate members. He kept improving FACEBOOK services and up until now put his members first. In one swift stock offering the FACEBOOK brand has now lost not only its integrity but a great deal of member support.

5. Either FACEBOOK's CFO should be fired or some explanation given to the media and more importantly FACEBOOK members. How can such a great social communicator like FACEBOOK remain silent as many of its members suffer significant financial losses and those FACEBOOK members not personally impacted now have to question FACEBOOK's readability and reputation? One would assume that FACEBOOK has a top PR executive in its employ. What is that person doing to reassure members and investors?

6. Shouldn't Mark Zuckerberg be sending a message to all his FACEBOOK members expressing some degree of chagrin over what has happened? His silence can make the public and his members feel he is indifferent, arrogant and was just out to make a "quick buck". This is not going to go away. FACEBOOK is still a major and highly profitable media brand with significant potential. But unless FACEBOOK and Zuckerberg take control of this disaster and at least show some remorse and take some steps to help those who got hurt by the Morgan Stanley hype - the FACEBOOK brand will suffer irreparable damage.

Steve's most recent book You Can't Fall Off The Floor - The Insiders' Guide to Re-Inventing Yourself and Your Career chronicles his 50 year career working for over 25 different companies with 189 lessons learned and insider tips from Gayle King, Cathie Black, Chuck Townsend and 28 others; Blacker is still going strong today as a partner in Frankfurt & Blacker Solutions, LLC. His web site is and e-mail address is

Read all Steve’s MediaBizBloggers commentaries at Media Reinventions.

Check us out on Facebook at
Follow our Twitter updates @MediaBizBlogger

The opinions and points of view expressed in this commentary are exclusively the views of the author and do not necessarily represent the views of management or associated bloggers. MediaBizBloggers is an open thought leadership platform and readers may share their comments and opinions in response to all commentaries.

Copyright ©2020 MediaVillage, Inc. All rights reserved. By using this site you agree to the Terms of Service and Privacy Policy.