The Facebook IPO has just earnt itself the unfortunate accolade of being the worst flotation for ten years. At the time of writing the shares had dropped 20% and what with the lawsuits and accusations of botched trading, the public offering will be remembered in a very bad light.

What’s perhaps more significant is that a number of social platforms have pulled their own IPOs as they accuse Facebook of ‘ruining’ private investors faith in their models.

The most notable amongst these to change their plans is Russia’s biggest social network, VKontakte, which has put back its stock market debut.

Okay, fair point, but all Facebook has done is prove what many market veterans suggested long ago was that social platforms have not yet proved their worth. Facebook was floated on a multiple of 25 times and the only reason it got away was because of its 900 user base and the sense of interest from the private investors.

The big City funds and many of the more aggressive hedge funds decided that Facebook was a little too rich for their liking. And without these funds, there is no floor in the market. No-one is there to mop up the shares which private investors like to dump on the first day of dealings.

Some say this IPO marks the end of this particular tech cycle and it will be some time before a multiple of 25 times is seen again.

There are others who say that Facebook is fundamentally flawed and it will bring down the whole tech market.

Whatever is around the corner for Facebook, we’re still in the opening chapters with most of the exciting plotlines still to come.