TECH STOCKS: Tech Stocks Follow Groupon Into The Red
By Rex Crum, MarketWatch
SAN FRANCISCO (MarketWatch) -- A late marketwide selloff hit the tech sector just before the market closed Thursday,
with big losses from online daily deal company Groupon Inc. highlighting the day's weakness.
Groupon (GRPN) shares plunged early and gave up more than 24% to close at $4.53 as the market showed what it thought
of the company's disappointing quarterly results and outlook.
Late Wednesday, Groupon reported a fourth-quarter loss of 12 cents a share, or 5 cents a share excluding one-time
items. Analysts surveyed by FactSet had forecast the company to earn 3 cents a share. Groupon also gave a first-quarter
sales outlook that fell short of Wall Street analysts' estimates. See: Groupon bruised as disappointment grows.
Several analysts cut their ratings on Groupon's stock Thursday. Raymond James analyst Aaron Kessler cut his rating on
Groupon to underperform, or sell, from market perform, due to matters such as weak revenue and profit prospects.
"In the near term, we expect top- and bottom-line growth to be limited and expect the shares to remain pressured until
growth and margins recover, likely not until late 2013 at the earliest," Kessler said, in a research note.
Along with Groupon, losses also came from International Business Machines Corp. (IBM), AOL Inc. (AOL), Priceline.com
Inc. (PCLN) and EMC Corp. (EMC).
Internet radio company Pandora Media Inc. (P) saw its shares give up more than 4%, to close at $12.20. In a blog
posting Wednesday, Pandora founder Tim Westergren said the company would begin limiting free listening on mobile devices
to 40 hours a month in order to better cope with rising royalty rates. Desktop and laptop computer users will still have
unlimited listening hours.
Zynga Inc. (ZNGA) shares fell 4%, to $3.38, giving back some of its recent big gains that were spurred on by moves by
the states of Nevada and New Jersey to legalize gambling online. See: Rex On Techs: Betting on Zynga and Legal Online
Small gains came from Hewlett-Packard Co. (HPQ), Netflix Inc. (NFLX) and Facebook Inc. (FB).
Salesforce.com Inc. (CRM) shares rose 1.4%, to close at $169.22, ahead of the business software company's quarter
results, due after the market close.
The Nasdaq Composite Index (RIXF) ended up shedding 2 points to close at 3,160, while the Philadelphia Semiconductor
Index (SOX) and the Morgan Stanley High Tech 35 Index (MSH) managed to eke out small gains.
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
Copyright (c) 2013 Dow Jones & Company, Inc.