Have the Wall Street wobbles taken the air out of the tech IPO bubble?
The events of the past week have certainly taken some of the froth off the coffee. But, to mix metaphors, have they really burst the bubble - or is Facebook still worth $750 billion?
Pandora Media and Renren, the Chinese Facebook, were both well below their IPO price. Renren shares have lost almost half their value since May.
LinkedIn shares were down 10 percent. Evercore Partners downgraded it to "underweight" and called the company "the most expensive name in our coverage universe."
Even Morgan Stanley, one of the lead underwriters on LinkedIn's IPO, have demoted the stock to "equal-weight." Bloomberg News described the move as " an unusual loss of support" from the securities firms. Three weeks ago JPMorgan Chase, also a lead manager of the IPO, took similar action. LinkedIn stock is now down to $91.36. OnJuly 15, it closed at $109.97. With clouds all around, more and more IPOs are on hold. Investors love tech IPOs, said one commentator, because as a rule they offer bigger returns but is there a change on mood in the ofing? Investors have pushed up new tech stocks so much recently that many observers have been reminded of the dotcom boom and bust of the late 90s and early 2000s. Online radio company Pandora is down 15.5 percent from its IPO price. The shares of GSV Capital an investment fund that owns stakes in companies like Facebook, Gilt Groupe and Chegg, are off almost 30 percent since hitting a record just three weeks ago. Nick Einhorn, an analyst at IPO experts Renaissance Capital took the view in an interview, "Less mature, less profitable companies could have a tougher time going public." This week almost a dozen IPOs are due to have their prices set. Einhorn's view: This will be a good test of the severity of the sell-off.