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> Lots of people (myself included) had been saying that Facebook was overvalued pre-IPO.

You could have shorted the stock or traded options.

Before you short any stock, it is wise to keep in mind the maxim "Markets can remain irrational a lot longer than you and I can remain solvent". This isn't really a problem on the long side (sans margin), but is a real problem on the short side.

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That's the main reason I didn't short it - so many people seemed so invested in the IPO being a success, that I thought it would turn into a self-fulfilling prophecy. I'm surprised it fell so far and so fast; I think the trading glitch on NASDAQ took the bubbles out of the champagne for so many people that fiscal reality set in a lot earlier than it would have otherwise. Of course, going on the market at $38 didn't help, but their pricing strategy was sort of constrained by activity on Second Market.

This. You can't even safely short a stock that you're certain will crater sooner or later, you also have to know when, and how high it could go first. You're betting you know just how irrational the market is.

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