Except the employees would have been sacrificing a higher salary for these shares so they where hardly free.

> The only people hurt by the initial over valuation were the people that bought high

The people that got burnt where those that read the IPO document and assumed it was not a work of fiction. The people that made money where insider trading on information not yet public.

The others that will get hurt are the next set of companies that try to float. The market will be reluctant to make the same mistake again.

Bad IPOs damage the credibility of the market and dmaage the ability of companies to float and that Facebook IPO was just a joke.

Anyone hired after their valuation was fairly high who was given options would be given options with a high strike price. If the stock never gets there, those options are worth nothing.

A large part of the people who were hired in the last year, with apparently generous option packages, now have Facebook on the resume and no golden handcuffs holding them. And a lot of other employees who had golden handcuffs are going to be thinking about places to bail. This could give them a significant retention problem.