Groupon crashes to $16.96, way below the $20 IPO starting point
Shares in Groupon, the daily deals company, once up at $26, were yesterday way below the $20 figure set for their IPO on November 3 .The stock closed yesterday at $16.96, after beginning the day at $20.07. The Wall Street Journal commented,"This is embarrassing, folks."
Groupon: back to the starting gate
The stock had dropped the previous day by $3.51 to $20.07 , its biggest one-day loss far after hovering around $26 for the past few weeks.
Analysts said the fall might be down to concerns about the health of the e-commerce market and rising competition.
Groupon's main rival, LivingSocial , is offering 20 national deals with major retailers starting on so-called Black Friday, the day after Thanksgiving.
The Wall Street Journal said the sharp drop in Groupon's price "may be a sobering sign for other high-profile Internet companies awaiting IPOs."
David Menlow, president of IPOfinancial.com told the WSJ the sudden decline represented "a break in the thinking that the Internet is still a safe platform for technology speculation," It meant investors would be more skeptical of "automatic high-demand IPO."