Investors have a number of reasons not to like Facebook’s stock, but movement of the shares has become irrational.

Facebook Inc. (NASDAQ: FB) has, according to many analysts, reached the point where it cannot easily add to its nearly one billion members. Its revenue growth slowed last quarter, and likely will again in this one. Facebook barely has a mobile strategy, even though the smartphone has become the PC-equivalent. CEO Mark Zuckerbug has voting control over the stock and can contradict any board decision. His actions have sometimes been rash, not unexpected for someone under 30 who labors under a great deal of pressure. The Facebook initial public offering was a disaster, and the lawsuits over the fiasco have just started.

Yesterday, Facebook shares dropped 5.5% to $20.72, though there was no news to pressure the stock. Facebook’s shares rose more than 6% in the three prior trading days. Once again, there was no material news. LinkedIn Corp. (NYSE: LNKD) posted better-than-expected numbers. Some Wall St. analysts have wondered why Facebook is not more like the professional network, which has stable revenue from more than one source. Facebook’s revenue comes primarily from consumer marketers who can be fickle, particularly because of concerns about the company’s effectiveness for ads.

Maybe, at some point, the volume and price spikes and dips will settle down. It would be an indication that the markets view the company as a mundane business, just like the businesses of nearly every other large cap firm.

Douglas A. McIntyre

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