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.