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Over a year after its initial public offering, Facebook’s stock closed above the $38 per share IPO price for the first time. So is the CFO finally doing his job? Perhaps he is, if his role is to maintain Facebook’s market value…a perspective The New York Times’ Andrew Sorkin alluded to when he suggested that the IPO had been botched. One may have a different view if the CFO’s job does not include managing investor portfolios…a perspective neatly summarized by Mark Cuban last year. Much of the debate may hinge on how we view the production of shareholder value.

“On the face of it, shareholder value is the dumbest idea in the world. Shareholder value is a result, not a strategy…your main constituencies are your employees, your customers and your products.” –Jack Welch

While an individual stock price is simply the intersection of supply (i.e., the ask price) and demand (i.e., the bid price), there are many underlying factors that culminate in a specific price outcome. Rather than focusing on the outcome, maintaining an IPO price or minimizing short-term volatility, an organization is better served in the long run by focusing on strategy and execution. Cuban 1, Sorkin 0.

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