Something is wrong on Wall Street.
The whole financial community is aflutter over Facebook shares, which stumbled out of the blocks as a publicly traded company last month.
But that’s not the problem. The problem is that the company’s market capitalization is completely out of whack with acceptable notions of corporate significance and meaningful contributions to society. The value of Facebook shares multiplied by the number of those shares is — at last tally — an amazing $87.33 billion.
For comparison’s sake, let’s look at the market caps of some of the companies tracked on the official Home Channel News Stock Watch:
• Builders FirstSource, the largest publicly traded chain of lumberyards, $378 million — that’s million with an “m,” not a “b;”
• Masco, diversified home product manufacturer and brand developer, $4.50 billion;
• Stanley Black & Decker, maker of tools and owner of an iconic brand that has lasted for generations, $11.71 billion; and
• The Home Depot, the world’s largest home improvement retailer, $75.25 billion.
These are companies with any number of the following: a) large plots of real estate in well-trafficked cities, suburbs and rural areas; b) sophisticated systems to profitably deliver products to consumers; and c) a capacity and knowledge to make things to be used in or around the house.
Facebook does none of these things. Instead, it offers invitations to play Mafia Wars or view an endless series of baby photos, all very similar in nature. (Note to parents: I’m not talking about your baby’s photos.)
From Silicon Valley, one can almost hear the protest: “But Facebook has billions of users.” To them I say: “Come on. The Atlantic Ocean has billions of users, too. That alone doesn’t make it a big business.”
Here’s an extreme viewpoint from one of our valued readers: “Facebook is a monumental waster of people’s time and creates nothing of lasting value.” I just posted this comment to the Home Channel News Facebook page.
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