Public market newcomers getting crushed in sell-off

6 Comments

The stock market opened with a swift sell-off Monday morning, the first day of trading after Standard & Poor downgraded the credit ratings of credit agencies linked to the United States government’s long-term debt. And the web’s public market newcomers have become some of the hardest hit stocks in the ongoing stock market tumble.

As of noon Eastern Time, the Nasdaq composite index was down about 3.5 percent and the New York Stock Exchange index was down 4 percent from their closing prices last week — but newly public tech companies Pandora (s P), LinkedIn (s LNKD), Zillow (s Z) were all down significantly more than that.

Internet radio company Pandora’s stock was down 7.5 percent as of noon ET Monday, while real estate website Zillow showed a 6.5 percent decline. Professional social network company LinkedIn has been probably the most warmly welcomed company to the stock market since its IPO in May, but it was also one of the hardest hit in Monday’s sell off. LinkedIn stock was down nearly 11 percent as of noon ET Monday, trading at around $80 per share.

If the current activity is any indication, newly public Internet companies are among the first to go when investors start pruning their portfolios. Could this halt the ongoing initial public offering wave that has been building in the tech industry for several months? What does this mean for Internet companies such as Zynga and CafePress that are currently in the IPO pipeline? Share your thoughts in the comments.

6 Comments

Joe McCann

Uhh, no. 4.5% is not a selloff. Look at Bank of America. Arguably a much larger company than any recent IPO, down 17%. That’s a selloff.

Michael Schmidlen

Looks, sounds & smells like “reality” to me…

Justin Kruger

Investors are shoring up profits, and are probably finding commodities to buy into. If the stock market is going to take a hit where would you put your money? In things people need?

Stupid lawyers for politicians just don’t get math and probably never will. We need economists, mathematicians and engineers in congress.

Patrick Sullivan

Too bad economist, mathematicians and engineers are too smart to get into politics in the first place. :(

Patrick Breitenbach

These stocks have limited shares available for trading so price changes tend to magnify in both directions.

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