FB, GRPN and ZNGA Are All Broken IPOs
Facebook, Zynga and Groupon - if you received shares of any of these three companies in their initial public offerings (IPOs) and are still holding, you are not very happy right now. If you bought shares in any of these three companies on the day that they opened for trading and are still holding, you are REALLY not happy right now.
It was supposed to work like this - Zynga and Groupon were supposed to debut to great fanfare and swelling share prices, setting the table for the Granddaddy of all tech IPOs, Facebook. Facebook was expected to blow the doors off of the market in a smooth and flawless public offering, but that didn't end up happening.
Zynga and Groupon made their debuts and then immediately traded below their offering prices, turning them from hotly anticipated offerings to broken IPOs. Shares of the two companies fell and fell and fell after their IPOs.
Nobody expected that the same thing would happen to Facebook, but it did. Facebook’s IPO, which had been the subject of careful and meticulous planning, quickly turned into a debacle that has already spawned lawsuits, finger-pointing and a likely SEC investigation. Facebook's IPO has damaged the reputation of Facebook, Morgan Stanley and others.
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The only word that you can use to describe the performance of shares of Facebook, Zynga and Groupon so far - ghastly.
Let’s look at the numbers:
Facebook Priced @ $38/share, opened @ $42.05 and currently trades at $31.74
Groupon Priced @ $20/share, opened @ $28 and currently trades at $11.83
Zynga Priced @ $10/share, opened @ $11 and currently trades at $6.89
If you managed to secure shares in these three public offerings and are still holding, you are currently down:
Facebook, -16.5%
Groupon, -41%
Zynga, -31%
If you bought shares shortly after the three stocks opened for trading and are still holding, you are currently looking at losses of:
Facebook, -24.6%
Groupon, -57.8%
Zynga, -37.4%
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If you are a tech company that was looking to price their IPO anytime soon, good luck with that. The disastrous Facebook IPO has likely crushed the market for tech IPOs for at least the near-term - don’t be surprised to hear about numerous offerings being postponed. Investors just don’t have much of an appetite right now.
Filed under: General Market News
