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MAKE MONEY BLOG$~After the Facebook initial public offering, what’s next for the new crop of Internet stocks?
Facebook has been beset with questions since its IPO dropped below its offering price of $38 per share. The troubles of the stock have affected a number of other new Internet stocks. Now, with lock-ups expiring, what will happen next with these stocks?
Social gaming company Zynga’s lock up agreement ends on May 28, 2012, meaning that those shares will go on the public market May 29. About 325 million shares will be freed up on Tuesday. From Zynga’s S-1 filing: “Substantially all of our outstanding shares, other than those sold in our initial public offering, are subject to lock-up agreements from that offering that expire on May 28, 2012.” Another 200 million shares will be released later this summer.
Zynga’s stock has been languishing of late. The stock got a boost in February, when Facebook‘s S-1 for its IPO was filed, revealing that Zynga made up 12% of Facebook’s revenue. But after Facebook’s IPO flopped, Zynga dropped in sympathy. Zynga recently posted earnings that beat Street estimates. The stock closed Friday at $6.61, down 2.79% for the day, and well below its IPO price of $10 per share. Zynga was the biggest Internet IPO since Google at the time but closed below its offering price at $9.50 per share on the first day of trading.
Meanwhile, daily deals company Groupon’s lock-up expires on June 1, which will open up the possibility of more than 600 million shares being sold. Groupon priced its blockbuster IPO in November at $20 per share, but the stock has been hovering below $15 per share since April. Groupon shares closed Friday up 1.35% to $12.05. Meanwhile, Groupon recently posted first quarter earnings that beat expectations.
How will these shares coming to the market affect the stock prices? Stay tuned next week.
source: forbes.com
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