Earlier this year, interest in the social media and technology
sector was incredibly high. Many investors hailed the new publicly
traded companies as the next generation of the internet, so called
'Web 2.0' firms (read
Three ETFs to Play the Tech IPO Boom
What a difference a few months can make.
Now, many companies that have recently debuted in this space
have seen floundering stock prices and some big investors are
calling for the heads of CEOs who are in charge of these struggling
firms. Seemingly the only one that is doing well this year is
, a firm that arguably received less press than almost any other in
the space, but has added a robust 67% YTD.
Instead many in the media have been focused in on the many
losers in the space such as the following companies:
- down almost 50% since its debut
- down 78% YTD
- down 3.7% YTD, -28% since IPO
- down 40% YTD
- down 68% YTD
What happened to this once vaunted sector? Will these companies
survive or are the doomed to fall in short-order?
Personally, I think the bubble just popped for much of the
space, and with a weakened economy, no one was willing to bet on
the uncertainty that comes with many of the names listed above.
With that being said, of the five listed losers, I think FB
probably has the best long-term promise (with its enormous user
base) although Pandora could be an interesting play as well,
especially if they go further into the automotive market (read
The End of the Social Media ETF Nightmare?
Meanwhile, I think Zynga could have some more short-term
troubles given its weak product lineup and the fact that the
being sued by rival EA
. This could put even more pressure on ZNGA, particularly given
some of the near-term troubles that their partner (Facebook) is
What do you think? What is the best of the worst in the social
Let us know your thoughts in the comments below!
FACEBOOK INC-A (FB): Free Stock Analysis Report
GROUPON INC (GRPN): Free Stock Analysis Report
LINKEDIN CORP-A (LNKD): Free Stock Analysis
PANDORA MEDIA (P): Free Stock Analysis Report
GLBL-X SOCL MDA (SOCL): ETF Research Reports
ZIPCAR INC (ZIP): Free Stock Analysis Report
ZYNGA INC (ZNGA): Free Stock Analysis Report
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