I did a FOX Business interview about Facebook. I am tired of writing and talking about it as much as everyone else is tired of hearing about it. So I am going on Facebook hiatus for a (long) while. My last comment will be this. I got a question from a reader asking me if my two articles were contradictory to each other. On May 18, before the IPO, I wrote that Facebook stock was overvalued, while last week I wrote that Facebook’s valuation at IPO was fair. Those statements are not contradictory. The first article was making a point about the fundamental valuation of Facebook, while the second dealt with the company’s valuation on the day and in the early hours of the IPO. The valuation at IPO is independent of a company’s fundamentals: The underwriter’s job (if they are truly working for the IPO company) is to set the price as close as possible to where the supply and demand balance is.

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