September 25, 2022

So How’s That “Social Media” Thing Working Out? Facebook and Groupon Investors Get Scorched!

Two of the most hyped social media stocks of the decade have bombed big time – and it’s not just small investors getting crushed this time.

Many large sophisticated investors got their faces ripped off on the Facebook IPO including banking giant UBS that tallied up losses of a whopping $350 million.  Faring equally poor, investors who poured money into Groupon’s silly coupon business have been shocked by poor results and a crashing stock price.

Investor losses on Facebook (FB) from the high of $45 to today’s close of $21.20 total a staggering $50.9 billion.  Total investor losses on Groupon (GRPN) are an equally staggering at $16.8 billion.  Facebook has declined by 52% from its high while Groupon has crashed by 83%.  It goes without saying that both of these stocks were hyped by Wall Street and sold at valuations far in excess of what the companies would ever be worth based on earnings and revenues.

A look at the charts says it all.

Courtesy - yahoo finance

Courtesy - yahoo finance

Courtesy yahoo finance

Courtesy yahoo finance

Meanwhile, Mark Zuckerberg, Facebook founder, is no doubt laughing while he counts his billions even as he faces numerous lawsuits over what was supposed to the IPO that would make everyone rich.  No wonder that small investors, who have been burned by Wall Street numerous times, have given up on stock investing.

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