Facebook stock barely closed above the IPO price on its first day of trading. That must mean the IPO was a failure, right? Hardly. The fact that the media reflexively declare IPOs a success if (and only if) the stock price immediately goes up, is a triumph of investment banking propaganda over logic.

Think about it. The primary purpose of an IPO is to raise money and to create a liquid market for the shares. If IPO price is well below the price at which the stock then trades, the company has sold itself short. So instead of getting, say, $1 billion in return for 10 percent of the company, the owners get, say, $7 or $8 billion.

Just how this got turned around in peoples’ minds is anybody’s guess. But I like my guess best: Investment bankers have worked long and hard to make it gospel. By under-pricing the IPO (and escaping without criticism), underwriters win in two big ways. First, they get to sell shares to their best clients for less than the market says the stock is worth. Second, the chance that they’ll have to put their own money at risk by intervening in the market as buyers (as the underwriters did in the case of Facebook) goes down.

Who says you can’t fool all the people, all the time? Not Wall Street.