Critics Skeptical of the Future of the Social Media Industry
May 01 2012 - 8:20AM
Marketwired
Social media stocks have been becoming increasingly popular among
investors in 2012. They have even garnered enough attention to
launch their own ETF; the Global X Social Media Index ETF (SOCL)
which is up nearly 18 percent year-to-date. Despite the growing
popularity, critics are skeptical of the future of the Social Media
Industry after three companies who went public in the past year
have traded below their initial IPO price. Five Star Equities
examines the outlook for social media stocks and provides equity
research on Pandora Media Inc. (NYSE: P) and Yelp Inc. (NYSE:
YELP).
Access to the full company reports can be found at:
www.FiveStarEquities.com/P
www.FiveStarEquities.com/YELP
Pandora, Zynga, and Groupon, which were expected to "wow"
investors, have all seen their shares dip below their initial
public offering pricing. Pandora, which had an IPO pricing of $16
in June, closed at $8.88 Friday; Zynga, priced at $10 in December,
closed at $8.52; and last but not least Groupon, which went public
in November at a price of $20, saw shares fall to $11.98 at close
Friday. The recent losses from the last batch of social media
companies have raised concerns for the upcoming IPO of Facebook.
"There is some Facebook skepticism for the first time from IPO
investors, mostly big mutual funds, having gotten burned badly on
buying into the offerings of Pandora, Zynga and Groupon," said Sam
Hamadeh, CEO of PrivCo, a research firm.
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Pandora Media is an Internet radio in the United States. As of
January 31, 2012, it had over 125 million registered users. The
Music Genome Project and its playlist generating algorithms predict
listener music preferences, play music content suited to the tastes
of each individual listener and introduce listeners to music they
will love. Pandora generates revenue from advertising. It also
offers a subscription service to listeners. The company announced
that their 2012 annual meeting of stockholders will webcast live
from Oakland, Ca. on Wednesday, June 6, 2012 at 2:05PM PT / 5:05PM
ET.
Yelp connects people with local businesses. Its users contribute
reviews of every type of local business, from restaurants,
boutiques and salons to dentists, mechanics and plumbers. Its
platform provides local businesses with a range of free and paid
services, which help them to engage with consumers at moment when
they are deciding where to spend their money. The Company generates
revenue from the sale of advertising on its Website to local
businesses and national brands. The company has scheduled a
conference call to discuss 2012 first-quarter earnings on
Wednesday, May 2, 2012 at 1:30 p.m. PT.
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