Did Facebook Kill The Tech IPO?

In today's edition of "Talking Stocks," Austin wonders whether Facebook (NASDAQ: FB  ) killed the tech IPO. With Facebook's botched entrance to the public markets, many investors are starting to argue that the social media titan may have permanently scorched the earth for tech IPOs. One example: The next slated tech IPO on Morgan Stanley's (NYSE: MS  ) roster-- Kayak-- pushed back the decision to go public. 

However, Austin thinks that what's become a long string of disappointing newly public tech companies is actually what has soured the market for these companies. While Facebook is clearly the largest and most known, it's really the culmination of a group of mismanaged IPOs. Unjustifiable multiples and low-float strategies did just as much damage here. That doesn't mean that tech companies are done going public for now, either. Austin mentions just a few names that people expect to hit the IPO docket in the near future.

If there is one thing we learned from the Facebook IPO, it’s this: Don’t buy the hype. Our top tech analyst, Eric Bleeker, warned investors to forget Facebook, and told them about the tech IPO they should be buying instead. If you missed his call the first time, it’s not too late; this company has room to soar.

Austin Smith has no positions in the stocks mentioned above. The Motley Fool owns shares of Facebook and LinkedIn. Motley Fool newsletter services recommend LinkedIn. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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  • Report this Comment On June 07, 2012, at 8:25 PM, Hestheone wrote:

    Sigh. I thought Motley Fool knew about investing. Kayak knows it should wait until the market stabilizes. The market is too volatile. Remember the news last Friday that the DOW has given back all its gains this year? FB stands alone because only fools thought the issue and price were justified by performance or potential. Principals dumping and running did not help matters either. Although Motley Fool may shill for the underwriters, even retail investors saw that FB was a sucker bet. Kayak has a good model and deserves a look, but there is no reason to rush when waiting a bit for investor confidence will make an IPO more attractive.

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