Forget about the Facebook IPO

As I write this, a large segment of the tech press is waiting for Facebook to file with the Securities and Exchange Commission for an estimated $5 billion initial public offering later this year.

The debut of such a widely-used site on the stock market is not inconsequential. But it’s a mistake to devote too many processor cycles to this story, and I’m glad that I don’t have to write any breathless blog posts about its alleged importance.

First: When you look at the resources the company can plow into its data centers, Facebook doesn’t seem short on cash–one of the more common reasons for startups to go public. It certainly doesn’t need the PR boost of an IPO.

Second: While employee profits from selling stock may add to California’s already-large population of millionaires, plenty of them have gotten rich off Facebook already. (One, former chief privacy officer Chris Kelly, is a friend of mine; I haven’t asked, but I’m pretty sure his kids won’t have to worry about taking out student loans.)

Third and most important: As a wonderfully-illustrated Gizmodo piece today should remind you, your odds of buying Facebook shares before the usual crazed run-up in value are exceedingly low. I’m not saying Facebook stock would be a bad investment, just that you shouldn’t expect to be able to flip it hours or days after the IPO.

There is worthwhile journalism to be done about Facebook’s finances and how the constraints imposed by public ownership will affect the company. (I’m looking forward to seeing my friend Rocky Agrawal break down the data revealed in Facebook’s S-1 filing.) But if you’re tempted to read a front-page tick-tock about the staging of Facebook’s IPO or a giddy forecast of its effect on Porsche dealerships in Palo Alto, I have a different suggestion: Dean Starkman’s Columbia Journalism Review explanation of how deal-chasing, investor-centric business journalism sold out the public.