"He hated Facebook (FB)." "No, he liked Facebook." "No, he flip-flopped on Facebook." "He gaffed me on Facebook." "He saved me in Facebook."

What exactly did I do with Facebook? Whom did I help? Whom did I hurt?

With Facebook's stock coming apart at the seams -- falling to an all-time low Monday of less than half its IPO price -- and lots of finger pointing going on, it may pay to spend a minute or two on what really happened with this debacle. That's because this has a lot more to do with Facebook itself, and the facts that changed involving Facebook, than it does about anything else that went on.

First, going into the road show for Facebook, everything looked extremely tight. The story was intact, featuring terrific membership growth and fabulous profits -- not just sales -- that were growing at a pace not often seen at any company.

I was drawn to it for two reasons. One, the facts: This was no ordinary company, nor was it an ordinary growth stock. This was a company with almost a billion users, most within the great demographic with which it's often so hard for advertisers to connect. The second, well, let's just say I am old. I lived through the previous dot-com craze, and we have to view this one as a craze, too. Given the time that's passed, this made me one of the few on Wall Street who have lived through every phase of the craze and knew how it would play out.

Going into the last week of the deal, while interest was still accumulating, I liked Facebook the company and Facebook the stock. Anyone who has ever lived through an Internet stock IPO, as I have -- and this totals about 500 people, give or take 100 -- knows the difference and the divergence, because the Internet captures the public's fancy like no other.

But with days to go before the deal, we heard that General Motors (GM) didn't like the website as a place to advertise. I quickly made my calls to the other large advertisers I know, and no one agreed with GM. Again, I have a good sample to go to, because I had always asked about the effectiveness of Facebook anyway, as I've been curious about the whole Internet business since I started TheStreet.

But because I had my ear to the ground at the underwriters' outfits, notably at Morgan Stanley, I picked up concern that Facebook wasn't growing as fast as we thought it was. It wasn't as if I got a call that said "This Facebook deal is a dog." Instead I got the call that the underwriters were increasing the size of the deal in order to meet retail demand but that they weren't certain Facebook was prepared for the rapid cellphone adoption plaguing its business.

I then checked around other website companies, and it looked like everyone was trying to deal with a remarkable migration from desktop to cellphone. It seemed Facebook was particularly bothered by it because CEO Mark Zuckerberg wanted to protect the user experience, and that meant not junking up the site with advertisements no one wanted to see.

At that point, with retail orders flooding in as the dealer-managers unleashed a flood gate of previously locked-up stock, it became pretty clear what would happen. You would have to buy the stock on the deal, and then flip it when it rallied.

That is what I suggested. In other words, you could like the stock on the deal as long as you could sell it, but not more than that -- and that's because the facts had changed twice. First, there was going to be much more supply. Perhaps that was because the big boys were given a chance to get out at a price that now seemed unrealistic, given a possible slowdown in Facebook's business, and there was still going to be terrific demand. The regular public, after all, didn't understand this new slowdown story that was emerging.

So what happened? While there were plenty of snafus and we saw lots of slothfulnesss, indigence and amateurish behavior by people we thought were professionals, the stock did open high and you had to flip. The problem that I didn't foresee was that they wouldn't let you flip because the machines broke. But it was the trade you had to make.

Ever since then, the stock has been going one way only, as everyone now knows that Facebook didn't really have a plan for the rapid adoption of smartphones as the preferred interface. Despite what the adults tell you, the kids don't like ads, and while they may look at them on their desktops and on their televisions, they are not interested in them on their cellphones. That's even the case if they are packaged in helpful stories or if they're done on the sly.

The ethos of not clicking on the ads is as thick as was the prevailing ethos when I started TheStreet -- that is, if you charge, it will fail. Of course, if I had not charged, we would have failed because I would have run out of money. Facebook, on the other hand, has tons of money. It isn't about to fail, and it has the flexibility to figure out how to make more money off cellphone use. It just doesn't have the flexibility of having a rising stock as it tries to figure out what to do to save the growth it once had.

Facebook, mind you, is not a fad. Advertisers do like it as a means of figuring out how to engage with their customers, and particularly with their youth. These companies are, frankly, almost all amazingly inarticulate about how it really helps them, but I think they like Facebook because it makes them feel in touch -- and no one is ever going to say "I want to be less in touch with my customers." Most look at Facebook as a superior form of a focus group. They look at Google (GOOG), however, as a superior form of advertising, and those are very different things.

Even Facebook seems confused as to what it should do about this. It talked about Electronic Arts (EA) being one of a handful of customers that thought Facebook was integral to its growth, perhaps to counteract how Zynga (ZNGA) was dissing it in every forum as the reason for the downturn in its business. But EA didn't say anything positive about Facebook on its call, and it had ample opportunity to do so.

To add it all up, Facebook the stock has been a fiasco largely because Facebook the company hit a wall -- the wall of a massive lightning-speed transformation from desktop to cellphone among Facebook users. That cut user engagement and diminished advertising appeal shortly before the deal went public, but it was too late to pull the deal and too dangerous to tell everyone how difficult things had gotten. Facebook was at a bridge too far, and there was no return for anyone -- except for the sellers who, of course, made out like bandits.

Jim Cramer is a co-founder of TheStreet and contributes daily market commentary to the financial news network's sites. Follow his trades for Action Alerts PLUS, which Cramer co-manages as a charitable trust and has no positions in stocks mentioned

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