Absolutely Loving All Of These IPO Failures (GRPN, LNKD, P, YNDX, DMD)

By: ispeculatornew
Date posted: 12.02.2011 (5:35 am) | Write a Comment  (0 Comments)

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Not that I want to rejoice for the losses of many or that I want to say “I told you so” or how smart I am (or not!!)… but except for Yandex (YNDX), every single one of these IPO’s that have have taken place in the past few months have been commented on this blog and I’ve always said that the prices seemed way too expensive. It’s not that I don’t like the businesses… In reality, I don’t for most of them but if you take a company such as LinkedIn (LNKD), I’ll be the first one to say that the company has an incredible future, a lot of growth to come for many years and I would actually love to buy some stock at some point. When? I don’t know. Everything has a price and for now, despite my love for the company, the stock is simply way too expensive. I might regret that one.

I’m not having as much internal debates about Demand Media (DMD), Groupon (GRPN) or even Pandora (P). From the start, all 3 of these businesses raised many questions about future growth and profitability that made their valuations seem excessive. But if investors wanted to buy at those prices, who is going to stop them right? They might end up being right but I would say that in all cases, they have been wrong so far. If you look at the IPO price of LinkedIn (LNKD), the stock is actually higher now but since the stock never traded anywhere near that price, I would say that for that one, the IPO price was simply set too low.

I’m Getting To The Great News

What I love about this is that in the next few months, two companies that I also love, Zynga and Facebook, will also turn public. As the media continues to spin those stories about internet bubbles, ipo’s at excessive prices, etc, there are increasing chances that one or both of these companies could come out at a decent price. I’m not holding my breath here but I think there is a shot.

Just listen at all of those experts saying that Facebook looking for a $100B valuation is insane. They might turn out to be right. But I personally have said over and over that I would jump at an opportunity to buy for that price. I don’t care that it’s more than double what Hewlett Packard Co. (HPQ) or 3M…. honestly, I don’t. That’s now how I base my analysis.

I’m not as convinced about Zynga as there are a few questions regarding top line growth, but I do think that at the right price, it’s worth a speculative investment.

Am I Being Selfish?

You might think that me hoping for these IPO’s to continue to do badly is selfish and you might be right. I would argue that those buying these companies did not do their homework. Of course,  I might be writing about my gigantic losses on Zynga and Facebook one year from now:) Oh, and GRPN, LNKD, P and others.. don’t go down too fast please, or else new tech IPO’s will continue to delay and guys like me will grow increasingly impatient.

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