Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 
OFFON

4-Traders Homepage  >  Equities  >  Nasdaq  >  Groupon Inc    GRPN

SummaryQuotesChartsNewsAnalysisCalendarCompanyFinancialsConsensusRevisions 
News SummaryMost relevantAll newsSector newsTweets 

Facebook Falls Below $38/Share IPO Price, $100 Billion Value

share with twitter share with LinkedIn share with facebook
share via e-mail
0
05/21/2012 | 04:00pm CEST

--Facebook shares fall below IPO price of $38

--Company's market cap falls below $100 billion

--Facebook's slide weighs on other Internet stocks

 
   By Drew FitzGerald and Matt Jarzemsky 
   of  
 

Facebook Inc. (FB) shares fell below its initial public offering price of $38 Monday, on just its second day of trading, a black eye for all those involved with the social networking company going public.

Facebook shares recently traded at $34.25, down 10.5%, in brisk trading. A move below $36.50 takes Facebook's overall valuation under $100 billion.

The premarket decline in Facebook shares sets the stage for the stock to close below the $38 level that shares were priced late Thursday. It is usually considered disappointing for a new stock to fall below its offer price so quickly, especially in the case of the most heavily traded IPO of all time.

"The underwriters completely screwed this up," said Michael Pachter, analyst at Wedbush Securities. "This thing should have been half as big as it was, and it would have closed at $45."

While investor enthusiasm was high for Facebook shares, leading bankers on the deal to increase the stock price and number of shares ahead of the offering, many observers questioned the more than $100 billion valuation being placed on the social network, where revenue and earnings growth were already beginning to slow.

"Facebook's IPO priced at a level well-above where we foresaw compelling 12-month returns," BTIG analyst Richard Greenfield said in a research note Monday. With revenue and earnings growth decelerating in 2012, "we find Facebook's current valuation unappealing."

On Friday, Facebook's shares repeatedly tested the $38 level, but lead underwriter Morgan Stanley (>> Morgan Stanley) reportedly moved to prop up Facebook's stock Friday. Dave Lutz, managing director at Stifel Nicolaus, said Facebook's underwriters might stop supporting the stock's price to thwart short-term traders counting on the underwriters buying at $38.

"We think this could just be a technique of Morgan Stanley trying to shake out some of the weaker hands," Lutz said. "What a lot of people will do [when the underwriters continue to step in] is say, 'If the underwriter's not going to let it break through, I'll just sit there and day trade right in front of it.'"

"In theory, [letting the price fall below $38] is a smart idea as long as there's not broader institutional selling," Lutz said. "Where Facebook closes today is going to be very important."

Technical glitches also marred Facebook's IPO on Nasdaq as the exchange struggled to deal with a flood of orders. Brokers and investors were unable to cancel or alter trades that had been placed early Friday morning, prompting Nasdaq to delay Facebook's open for 30 minutes.

Shares of Nasdaq OMX Group Inc. (>> NASDAQ OMX Group, Inc.) slid 0.6% Monday to $21.86.

Facebook's weak debut is setting the tone for the whole market.

"We're all watching Facebook," Lutz said. "That's going to take the wind out of the broader market, and you're going to have all the Internet stocks selling off."

Facebook's weak debut dragged down other newly issued online stocks on Friday, such as Zynga Inc. (ZNGA), LinkedIn Corp. (>> Linkedin Corporation), Groupon Inc. (>> Groupon Inc) and Pandora Media Inc. (>> Pandora Media Inc).

On Monday, Zynga fell 5.1% to $6.79, LinkedIn declined 4.7% to $94.33, Groupon slipped 1.5% to $11.41 and Pandora dropped 1.6% to $9.61.

Also, GSV Capital Corp. (>> GSV Capital Corp), a Woodside, Calif.-based fund that invests in venture-backed private companies, posted big declines. GSV has invested in Facebook, Groupon and Zynga, as well as the social-networking company Twitter Inc. GSV fell 8% to $12.10.

-By Drew FitzGerald and Matt Jarzemsky, Dow Jones Newswires; 212-416-2909; [email protected]

share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news on GROUPON INC
04/19 GROUPON : to Webcast First-Quarter 2017 Financial Results Conference Call
03/31 GROUPON : N.Y. judge dismisses lawsuit against Baltimore-based OrderUp
03/26 GROUPON : Sky Fund acquiring Groupon Israel
03/16 OFF HOURS : Classifieds Middle East chief advises start-ups to ‘embrace th..
03/16 GROUPON : New Groupon Survey Finds 60 Percent of Americans Plan to Start a Perso..
03/13 GROUPON, INC. (NASDAQ : GRPN) Files An 8-K Departure of Directors or Certain Off..
03/13 GROUPON, INC. : Change in Directors or Principal Officers, Financial Statements ..
03/13 GROUPON : Adds Joey Levin to Board of Directors
03/12 GROUPON : Supporting local business? There's an app for that
03/08 GROUPON : Fave Acquires Groupon Singapore
More news
Sector news : Internet & Mail Order Discount Stores
04/24DJBEBE STORES : Today's Top Supply Chain and Logistics News From WSJ
04/21 Visa's profit boosted by Europe unit, big card portfolio wins
04/20DJCOSTCO WHOLESALE : AmEx Feels Loss of Relationship With Costco -- WSJ
04/20 AmEx profit beats as higher spending blunts partnership losses
04/20 AmEx profit beats as higher spending blunts partnership losses
More sector news : Internet & Mail Order Discount Stores
News from SeekingAlpha
04/24 Groupon -3% as Morgan Stanley cuts to Underweight
04/20 Groupon rallies after Piper Jaffray confidence
04/06 YELP : Transactions is the next big thing
04/04 GROUPON : Why I Remain Hopeful
03/31 GROUPON : Some More Red Flags And Buybacks
Advertisement
Financials ($)
Sales 2017 3 136 M
EBIT 2017 82,8 M
Net income 2017 -79,6 M
Finance 2017 826 M
Yield 2017 -
P/E ratio 2017 -
P/E ratio 2018
EV / Sales 2017 0,43x
EV / Sales 2018 0,40x
Capitalization 2 186 M
More Financials
Chart GROUPON INC
Duration : Period :
Groupon Inc Technical Analysis Chart | GRPN | US3994731079 | 4-Traders
Full-screen chart
Technical analysis trends GROUPON INC
Short TermMid-TermLong Term
TrendsBearishNeutralNeutral
Technical analysis
Income Statement Evolution
More Financials
Consensus
Sell
Buy
Mean consensus HOLD
Number of Analysts 18
Average target price 4,77 $
Spread / Average Target 23%
Consensus details
EPS Revisions
More Estimates Revisions
Managers
NameTitle
Richard Williams Chief Executive Officer & Director
Eric P. Lefkofsky Chairman
Michael O. Randolfi Chief Financial Officer
Peter J. Barris Independent Director
Brad A. Keywell Independent Director
More about the company
Sector and Competitors
1st jan.Capitalization (M$)
GROUPON INC17.17%2 186
COSTCO WHOLESALE CORPO..7.63%75 643
TJX COMPANIES INC4.65%50 756
WAL-MART DE MEXICO S A..15.25%40 095
TARGET CORPORATION-24.10%30 298
DOLLAR GENERAL CORP.-3.58%19 633
More Results