I guess you could say that the bloom is off the rose for the Groupon IPO and the initial investors as the stock cratered this week. Tech stocks also hit the skids, the European market is still a major drag on the market, as if it needs one.
After jumping up during the first few days of selling to over 31 from the initial 20 offering price it settled in to the mid-20’s and stayed there.
It stayed there for a few days and then started a slow downward creep. Today it passed below the 20 floor at about 17.
There was always a certain amount of skepticism regarding the IPO, but reality seems to have settled in, for Groupon as well as a number of the other tech stocks who have gone public over the past year. Today the name WebVan came up again and that is not the kind of company wants to be seen in, or mentioned with.
This could also be a big signal that the market is not ready for another round of new tech companies to go public right now. Great way to raise some cash for the initial investors, but a horrible for the next round of stock investors who are now getting burned by Groupon. This should chill the interest for a while.
This will also have more than a few to go back to take a look at the Groupon model to see if it really has staying power. A number of newspapers have also announced another round of daily offerings for them to share with joint audiences in addition to their own unique daily discount offerings. The field seems to be a little crowded right now. Great for people seeking deals, but a horrible place to invest for the future as a stock.
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