Silicon Valley: From Rarified Air To Exhaust Fumes
Yet, it didn’t stop there.
If you turned on your financial/business media program of choice the results were the same. The accolades coming from the “tech” side reporting was filled with both sighs-of-relief, and a little smugness of, “See, those naysayers just don’t get tech or social. This proves the IPO market is alive and well!”
That was as of Friday, March 3rd, the day after the IPO’s debut. Then came Monday, and let’s just say – it was different this time.
By Monday the reporting went from, shall we say, exuberance mode – to justification mode. i.e., Don’t panic!!!
If you once again perused not just the broadcast media, but also the printed or online, the commentary was the same: “It’s still up 44% from its IPO price!”
Well, yes, that was true, yet, that was far from accurate as to explain what was taking place. A much better description of what was playing out would be something along these lines:
“Initial investors purchasing shares of Snapchat as it became a public company via the exchange profits now match the company’s core product. e.g., POOF! They’re gone. And it’s appearing to get worse. Much worse.”
By Tuesday anyone who had purchased at the opening bid of $24 would now not only have had any potential profit sent to the ether – everyone, and yes, everyone who stood in line to be first on either Thursday, or Friday just 4 days prior was now losing money on their core investment dollars. And like I said – it was only Monday.
By Friday of that same week? The meme of “Still up 44% from its IPO price of $17!” had fallen silent as that now had been halved. And yes – it gets worse.
Over the next 5 trading days the once again “IPO to prove to the world that not only unicorns were great, but “decacorns” were just fantastic powerhouses of business” began morphing into a creature that far too many dream themselves could do: It became a “teenager.”
In other words, its share price now began using numbers that began with “teen” as in 19, then 18 as its share price continued falling until finally ending the week solidly far, far beneath its triumphant $24-ish close only 5 trading days prior as they say in the investing world – “remaining a teenager” closing at $19 and change.