Facebook Inc (NASDAQ:FB) Partly Responsible For Social Media Companies Decline Including Groupon Inc (NASDAQ:GRPN) And Linkedin Corporation (NYSE:LNKD)
Facebook Inc (NASDAQ:FB) had its public offering on May 18 after months of anticipation. The debut was not up to the mark but the stock managed to close with a fractional gain from its offering price of $38, scoring the largest Internet IPO in market history.
FactSet Research data showed that the market capitalizations of some big social media shares including FB, Groupon Inc (NASDAQ:GRPN), Linkedin Corporation (NYSE:LNKD), Yelp Inc (NYSE:YELP) and Zynga Inc (NASDAQ:ZNGA) totaled approximately $106 billion.
Following the IPO, traders in these five major social media stocks have witnessed the group’s collective market value tumble by nearly $29 billion, according to a MarketWatch analysis.
Facebook opened with a market value of nearly $82 billion. LinkedIn was valued at $10.2 billion, leading Groupon, $7.45 billion, Zynga worth $5.2 billion and Yelp at $1.14 billion.
After the FB debut, that sum has declined by above a quarter to $77 billion as of Thursday’s close. Facebook faced the worst fall, retreating to $56.3 billion. LinkedIn declined to $7.9 billion; Zynga was down to $4.8 billion; Yelp slipped to $1.06 billion; and Groupon’s value fell to $6.8 billion.
Economic ambiguity has dragged broad market outlook into decline, and most important market indexes have swung wildly over the past month. Analysts also indicated certain problems related to some social media firms. For example, many still point to specific concerns on the growth forecast for Groupon Inc. Social game maker Zynga has noticed its market value down due to concerns about its own growth prospects.
Pachter of Wedbush discussed the significance of the market cap declines across the group, arguing that the decline after Facebook debut was largely the outcome of errors in the way the IPO was executed.
But Pachter agreed that the botched IPO has spread somewhat of a fade over the group. Pointing another high-profile company that is highly anticipated to go public in the near future, he added that if Twitter decides to go public now, they would not likely to worth as much they were ahead of the Facebook IPO.