Since its debut on November 4th, the stock has traded comfortably above the $20 IPO price. That was until yesterday, when the stock fell over 10% and as of 12:00 today (Nov. 23) it has dropped more than 14.95% down to $17.11 per share.
So what happened? According to Henry Blodget, CEO and Editor-in-Chief of Business Insider it's anyone's guess. "It could be that some investors are hearing bad news about Q4. It could be that the underwriters have stopped aggressively supporting the price. It could be the broader market. Or all of the above. The bottom line is that folks aren't willing to pay as much for the stock as they were a few days ago."
At the same time, he notes, the company is transitioning from hyper-growth to profitable growth, a change that usually takes a toll on stock prices. "In my opinion, the IPO price was too high to account for that."
The company entered the market after an extended period of zero IPO releases and poor results for those that had been released. Groupon's release and performance therefore drew a lot of attention.
Investors, venture capital firms, and tech startups viewed the company as a bellwether of future public offerings. Other IPOs-in-waiting followed the performance for signals it was safe to follow suit and enter the market.
Time will tell if Groupon will be trading steady at new and lower levels, if it will crash further, or if it will rebound.
So, which other IPOs are in trouble?
To help you explore this topic, we collected data on the 200 most recent IPO filings. We collected data on institutional money flows and short trends, and identified the names that have seen significant smart money selling and bearish sentiment from short-sellers.
Sophisticated investors, like hedge funds and short-sellers, seem to think these recent listings are in trouble -- do you agree?
List sorted alphabetically. (Click here to access free, interactive tools to analyze these ideas.)
List compiled by Eben Esterhuizen, CFA:
1. Demand Media
2. LinkedIn Corporation Class A
3. Pacira Pharmaceuticals
4. Sequans Communications
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.
Kapitall's Eben Esterhuizen and Rebecca Lipman do not own any of the shares mentioned above. Institutional data sourced from Fidelity, short data from Yahoo! Finance.
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