Many people remember the
dot-com bubble that took place from approximately 1995 to 2000. How could anyone forget the pets.com puppet?
Now another wave of Internet companies are going public. Let's take a look at how those that already have gone public have fared:
- Zynga, Inc. (ZNGA) -- The developer of social games such as FarmVille had its initial public offering (IPO) last week, and the stock fell 5% on its first day of trading.
- LinkedIn Corporation (LNKD) -- The "world's largest professional network" debuted on the New York Stock Exchange in May. On the first day of trading, the stock closed at $94.25; today it trades around $65.
- Groupon, Inc. (GRPN) -- This deal-of-the-day website has been publicly traded since early November. The stock ended the first day of trading at $26.11 and currently trades at around $22.
- Pandora Media, Inc. (P) -- The Internet radio company closed its first day of trading back in June at $17.42. Today it trades at just under $10.
Of course, the blockbuster expected IPO in 2012 will be Facebook. The Facebook IPO is expected to create at least a thousand millionaires and could value the company at as much as $100 billion.
From the looks of how the four "social stocks" referenced above have performed, hopefully investors are remembering the dot-com bubble and focusing on traditional metrics such as the
P/E ratio.