Facebook crashes the Nasdaq-100

Facebook (FB) is joining the Nasdaq-100 Index ($NDX)? Great. What do you have to do to get in these days, knock?

In any other world, this would be baffling. It's been less than a year since the company's initial public offering. Its share price tanked immediately afterward and could be modestly described as volatile in the months since. Share value hasn't approached its nearly high and sank as low as $17.73 in September.

Facebook's stock price has risen nearly 55% since then, but is still down more than 28% on the year. In Nasdaq's world, not only is this OK, but it makes Facebook a sturdy pillar on which to rest its market. Nasdaq started engraving Facebook's invitation in April by shortening the mandatory minimum "seasoning" period from two years to six months -- seemingly just to get Facebook into the mix.

Nasdaq really loves Facebook's $60 billion market cap, but has a short memory when it comes to these kinds of moves. Doesn't anything about a social networking company that gets 92% of its income from online games like "FarmVille" and "Words With Friends" seem eerily familiar? Doesn't the fact that Facebook blamed online gaming partner Zynga (ZNGA) for its losses last quarter, spurred Zynga into a round of layoffs and signed a new agreement distancing itself from Zynga jog some long-repressed bad memories?

Was there a nearly 4,000-point fall over the next two years that left you with some selective amnesia? That's about the only way to explain why Facebook's in your Nasdaq 100 despite its market track record. You know who else once looked like a contender for that slot? Groupon, when its stock debuted last November with a $20 share price behind the company's nearly $18 billion market cap. A year later, share prices are below $4 and the market cap has shrunk to nearly $2.5 billion.

That two-year seasoning period was in place to prevent just the kind of things that happened to the Nasdaq during the dot-com boom. By just letting shaky Facebook glide its way through the revolving door and into its upper echelons, Nasdaq just lost any "elite" status its 100 may have had. An invitation-only party at a villa in Monaco just turned into a open-door 2000s nostalgia party, and is inviting all of the same headaches from a decade ago as a result.

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