What Does the Facebook IPO Mean for Apple?

The Facebook IPO may have been the most-hyped moment in stock market history, and it was certainly not without its drama.

It made celebrities from Mark Zuckerberg to Bono filthy rich(er), and left many small-time investors holding the bag, wishing they hadn’t gotten in the sandbox with the big boys.

But now that the day of reckoning has passed, Apple lovers should take the time to attempt to discern what the mega-IPO’s long-run impacts on Apple really are. The mega-companies are two of the leading faces of the tech revolution that has seized our lives in the past decade or two.

Zuckerberg himself is the new Steve Jobs, an unexpected leader in the sea change that has swept our lives into the 21st century. No one short of Zuckerberg himself could have predicted just how ubiquitous his social network was destined to become.

And the ways they interact with one another in coming years will be one of the unavoidable storylines of modern American business, with the two companies – along with others like Google and Microsoft – struggling to keep their pieces of the tech pie.

In the lead-up to the IPO over the past month, we saw just how important the interplay between Facebook and Apple will be.

Stock market observers pointed to the large number of investors selling Apple (AAPL) as the big day approached last week as a sign that Apple was going to take a huge hit as people sought to move their holdings into the hottest new stock on the block. “Apple is being used as an ATM for the Facebook IPO,” wrote Chris Verrone at Strategas. And CNBC correspondent Jane Wells went so far as to predict that the exodus from Apple was a reflection not just on Facebook — a tenuous argument in itself — but on the state of Apple itself. “If Facebook doesn’t pop tomorrow, maybe Apple’s fall is about…Apple,” Wells wrote last Thursday.

But by tracking what actually happened when Facebook (FB) hit the market last Friday, and using that information to test these early assumptions, we can see that — as so often happens in matters of money and technology — the prognosticators were proven wrong.

Facebook stock debuted at about $38 last Thursday, and opened for its first public trading day at $42, swiftly dropping back to $38 by the close.

Meanwhile, Apple share prices held up in the moment of truth. It saw a quick dip at open but then was trading at about $532 near the close of the session, meaning it had actually increased 0.5 percent that day.

Facebook, meanwhile, has been a flop, so much so that regulators are even saying Morgan Stanley may have botched the IPO.

On Wednesday, FB stock closed at about 32, down significantly from last week, and even more from its short-lived peak.

And some observers say that this is in keeping with the true worth of the two companies, not the one that we had been led to accept as the FB IPO neared.

Brett Buckley, a contributor at Seeking Alpha, fleshes out this point in great detail, first explaining that, “Apple is an iconic and transformative company. It is a mature business, but has managed to reinvent itself and remain ‘cool’ for a few decades now.” Facebook, on the other hand, is unbelievably “cool” right now, he explains, but the numbers just don’t support the theory that it can sustain its growth and become a real threat to the supremacy of more established, better-positioned companies like Apple.

“Facebook subscribers are growing at 25-30% right now. Worldwide Internet users are growing at 10-15%. Facebook subscribers are 40% of all Internet users,” Buckley writes. “At these current growth rates, there will be more Facebook users than Internet users five years from now … Facebook subscriber growth has to start decelerating dramatically at this point. It’s just simple math.”

So though Facebook is the hottest thing on Wall Street right now, and it will be a fierce competitor in the years to come, Apple fans can rest easy knowing that the long-term health of the company is not in jeopardy as a result of Facebook’s swift ascendancy.