How to forecast FB stock price correctly - read the Prospectus

100 days on, and Facebook share price has crashed c 40% from its IPO, It joins Zynga and Groupon in a downward plunge (see sheet above).

Nowadays of course everyone knew it was overvalued, but beforehands many were saying it was a snip at its IPO valuation. We were one of the few who didn't and were called "analyst heroes" because of it. But, as Henry Blodgett points out, all you pretty much needed to do was read the prospectus, and Mark Zuckerberg's letter, and it was easy to figure out.:

Didn't anyone even read Facebook's IPO prospectus? The answer, I can only assume, is "no." Because if anyone had read the Facebook IPO prospectus, they would have learned, among other things, the following:

Facebook's growth rate was decelerating rapidly.
Facebook's user-base was rapidly transitioning to mobile devices, which produce much less revenue.
Facebook's operating profit margin was already an astounding 50%, which suggested it had nowhere to go but down.
Facebook's CEO had a nearly unprecedented amount of control over the company.
Facebook's CEO had set up this astounding level of control intentionally. Mark Zuckerberg knew all about how impatient public-market shareholders are. And he set up the whole company so he would never have to pay attention to their whining.
In the 9 months following the IPO, insiders would be free to sell more than 2 billion shares of Facebook that they had been holding for years.
Facebook was going public at an astoundingly high price for a company with these characteristics—about 60-times the following year's projected earnings, in a market in which other hot tech companies like Apple and Google were trading at less than 15-times.

I agree, most of what you needed to know was right there, it wasn't rocket science - but of course, in the Bubbletime the only way is up!

Which makes me wonder what all those analysts who were forecasting $100m valuations and up were doing, exactly. Or, whether the reforms since 2001, that were supposed to make analysts independent, have worked at all?