Joe Nocera glosses over the problem with Facebook’s IPO in arguing that we shouldn’t care whether its shares plunged after they started trading.

But let’s be honest. Were there really any long-term investors in Facebook that first day? Judging by the torrent of criticism that has rained on Facebook and Morgan Stanley, it sure doesn’t appear that way. Instead, what the Facebook aftermath suggests is that we’ve all become brainwashed into believing that, when it comes to I.P.O.s, up is down and down is up. A successful I.P.O. is one where the company gets hosed by Wall Street. A failed I.P.O. is one where the company’s interests, not those of Wall Street speculators, are served. It’s Alice in Wonderland goes to Wall Street.

There are, I’ll grant, two legitimate reasons to criticize the Facebook I.P.O. First, it appears that after Facebook revised its prospectus to reflect slowing revenue growth, the firms managing the offering whispered the bad news into the ears of favored clients. The S.E.C. has opened an investigation, but my guess is that it will come to naught. The firms have every right to talk to their clients — and no obligation to shout the news from the rafters. Reprehensible though this may seem, it is legal — and another indication of how I.P.O.s are really an insider’s game.

First, Nocera doesn’t know any better than you or I do how many people bought Facebook to hold for the medium to long term. I’d have to suspect, though that that number was hardly insignificant.

But more important, while it may be okay for analysts to tell their clients and their clients alone that they’ve lowered their outlook for a stock, it’s something different when those analysts work for the very banks underwriting the IPO.

And it’s even worse when the company being launched “whispered the bad news into the ears” of analysts and failed to tell everybody else.

— While the Facebook IPO may be something of a scandal, it also may not be illegal.

Dan Lyons talks to University of Michigan securities law professor Dan Adam Pritchard about that:

There’s a law called Regulation Fair Disclosure that requires public companies to disclose information to all investors at the same time. But there’s a catch: the law applies to public companies, Pritchard points out, and this stuff all happened before Facebook went public…

It’s true that a company preparing for an IPO is not supposed to give out information that differs from what’s in its official prospectus. But here again, there’s a catch: oral communications don’t count, Pritchard says. So as long as Facebook and its bankers shared bad news over the phone or in person, rather than via email and in writing, they’re off the hook…

Will any of this lead to more reforms of Wall Street like there were after the dotcom crash a decade ago? Probably not, Pritchard says. In fact, he says the only lesson anyone should take from the Facebook IPO is simply this: “The problem is small guys thinking they are going to get rich investing in IPOs. They’re not. They are going to get taken. They should stop investing in IPOs. They are bad investments. There is a lot of evidence showing that you’re better off putting your money into an index fund than into an IPO.”

— I like this Bloomberg News look at the retail investors—you know, the dumb money who didn’t get inside information about the company— who bought Facebook on the day it IPO’d.

Like the guy who spent a month’s salary on it:

“It’s disheartening to know that things get over-hyped,” Cefalu, a 34-year-old data-systems manager who spent about $4,000 on the stock, said in an interview. “That’s about a 12th of my annual income — so a month’s salary. I’m trying to do an on-my-own retirement kind of thing.”

And the college freshman who thought stocks only went up:

Michael McClafferty, a freshman finance major at Michigan State University, saw his “first big investment” turn into a $3,000 loss when he sold the shares at $35.

“I didn’t want to lose more,” McClafferty said. “I didn’t know what to do.”

The 19 year-old student estimates he spent $8,000 more than he wanted to while repeating orders that wouldn’t go through on the first day, and failing to cancel them because of the technical problems.

Find a bookie and bet on Spartans games, kid.

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Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu. Follow him on Twitter at @ryanchittum.