Somewhat lost in all the hoopla over Facebook’s secret change in guidance is that fact that it needed to change guidance.
In a rather somber video at TheStreet.com, influential CNBC host Jim Cramer said of the whole debacle:
“I think the numbers were really bad in May for Facebook. I think the adoption of mobile from desktop is happening much faster than people realise. I think the shift is so powerful that unless you have a series of advertisers who are happy with the results on mobile, then numbers, the projections are too high.
What may have happened is that they got some May numbers, Morgan Stanley, and the numbers weren’t what people thought and so they had to rapidly take numbers down, and because this is a public company they didn’t really know how to disseminate it.”
He added that he didn’t know that this was how it was always done with IPOs. If this is the case, as Morgan Stanley seemed to be trying to tell people, then Cramer would “really hesitate to ever recommend an IPO” in the future.
He added, “But the big story is maybe May was weak, and people are overlooking that story.”
Here’s the video of Cramer talking: