So, Facebook has dived in its debut. The world might be wringing its hands over this calamity, but it's business as usual for Hong Kong's long-suffering equity investors - just another new listing that has been disappointing.
There are many reasons why Facebook faltered. For one, its listing price was too high. But discerning investors are also interested in how the funds generated by this initial public offering (IPO) will be used.
In the case of Facebook, investors were told that the US$16 billion from the IPO proceeds would be devoted to enhancing working capital and general corporate purposes. In other words, Facebook had no plan or need for this mountain of cash.
The Facebook prospectus said as much: in the section labelled 'Use of proceeds' the firm said, 'We do not currently have any specific uses of the net proceeds planned.'
In classic stock market theory, listings are supposed to have a purpose. For example, money raised can be used to expand production or to make acquisitions or, possibly - if potential shareholders don't mind - to pay off debts.
The reality is that many IPOs are launched largely as vehicles for owners and key employees to 'monetise' (cash in) previously untradeable shares in their firm.