Did Facebook Ruin the IPO Party for Everyone Else?

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KayakFacebook's (FB) belly flop of an IPO continues to make waves.

The Wall Street Journal is reporting that Kayak -- the popular travel website that was supposed to be the next major dot-com to go public -- has been slow to get its investor roadshow going.

Kayak has all of the attributes that one would like to see in a debutante. The site that scours a multitude of sources to deliver the best fares and rates for flights, hotel rooms, and related offerings is profitable. Revenue climbed 32% to $224.5 million last year. A whopping 310 million travel search requests were submitted through Kayak during this year's first quarter, 45% ahead of the site's popularity a year earlier.

However, Facebook is a hard act to follow -- and not in a good way.

IPO Friend Request Denied

It's been two weeks since the ballyhooed Facebook debut failed on many different levels.

On the surface, it was a case of sheer underwriter greed. Why should a company that earned $1 billion last year be worth $104 billion out of the gate?


However, the actual exchange made things worse. Nasdaq (NDAQ) mistakes left a lot of buyers unsure if they had been successful in purchasing shares -- and by the time many received their confirmations, the stock was already trading lower. The exchange halts of Facebook sympathy play Zynga (ZNGA) did little to restore the confidence of individual investors.

If investors can't trust underwriters to establish fair dot-com valuations or the exchanges to execute their orders at a time of heavy volume, why would they rally around the next hot tech company to go public?

It's not just Kayak in a holding pattern.

  • Twitter -- the most eligible private Internet company now that Facebook has gone public -- would have been a slam dunk of an IPO if the social networking giant's deal wasn't crumbling over the past two weeks.
  • LivingSocial -- Groupon's (GRPN) nearest competitor in the daily deals space -- now has two reasons to hold off on going public. Both Facebook and Groupon are trading below their initial price tags.
  • Pinterest, Foursquare, and Tumblr are just some of the online speedsters that will probably now have to wait until the bad taste that Facebook IPO's has left in the market's mouth goes away.

It's going to take a lot of time or some very strong mouthwash to make that happen.


Motley Fool contributor Rick Munarriz does not own shares in any stocks in this article. The Motley Fool owns shares of Facebook
.


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34 Comments

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Holli, Chaney

The world is in a Socialist melt down due to government dependents. That has ruined the IPO market..

June 03 2012 at 5:07 PM Report abuse rate up rate down Reply
ajponi

Please stop sending me emails. Thank you. ajponi@aol.com

June 02 2012 at 7:51 PM Report abuse rate up rate down Reply
ajponi

Please stop sending me emails. Thank you!! ajponi@aol.com

June 02 2012 at 7:50 PM Report abuse rate up rate down Reply
GARY110252

Be happy! We'll be able to buy up all the Facebook stock we want at $3.00 a share...

June 02 2012 at 4:32 AM Report abuse rate up rate down Reply
mitchellrowe1

The Facebook Public Offering was the equivilent of " the shot heard round the world " . That event , although not the events that led to the offering's disaster , is the even that rang the bell . From the recklessness of removing the seperation of banks and brokerages , which held the system at a truce since 1933 , to the basic demise of the specialist system on the NYSE , to the insatiable greed of Chief Executives of the Major Underwriters , to the lust for grossly negligent offering prospectus and change information . I saw Mr. Prez of Morgan Stanley on CNBC , who among other nonsense excuses , blamed the investors for placing large bets on the "new issue" , with the purpose of "getting rich " on the opening pop . Of course , it was not mentioned that the day before the offering , the price was raised considerably , and the size was increased 25 % . Simple supply and demand economics , dictated immediately , there was a bomb in the engine room , waiting to implode . mr. and mrs. joe investor had no idea what they ordered into . Their brokers in the syndicate knew The underwriters knew , Facebook knew from the Conference call the afternoon before the offering , and the clock started ticking . Liquidity of the American Market , without the specialist system , has essentially disapeared . Mr . Prez at Morgan Stanley is certainly due , at least a $ 25 million bonus . Why shouldn't he ? Over at JP Morgan , Mr. Prez oversaw the trading loss of $ 3 billion , and then took a similar bonus . Just look at the floor of the NYSE on CNBC TV , other than the opening , it's a giant near empty room . When i was a kid starting out , they called what they now call NASDAQ - "OVER THE COUNTER" . That means if you want to sell , at market , you get tossed over the counter . If you want to buy at market , you get the same mohawk over the counter .
mitchell rowe ; retired - formerly a registered investment advisor

June 02 2012 at 12:16 AM Report abuse rate up rate down Reply
steves1709

Is anyone surprised that Groupon and FB have stagnated? They were both at their growth peaks when they went public.

June 01 2012 at 11:03 PM Report abuse +1 rate up rate down Reply
GymmyKramir

Boogawagarama
Good Morning Heatemydog!!!
Coming 2 u LIVE frum the Land of the Rising Sun (oops) in Heatemydog, China it’s Gymmy Kramir and the NYC Mad 4 Yer Money Show!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! (applause and cheerz).
Signs waving everywhere across China. NYC financial demon 2 b wed aNd there R parties Everywhere. China sez they r in the NYC financial PIGGS bridal party and bring many gifts.
I see this bystander.
Hey, Whatz up?
Hi. I luvs weddings bcause I getz 2 throw this rice away, insteads of using it as celibate herb 2 feed 4 my 103 children at every meal and every day.
Boogawagarama
Alright and mooooooooooving a long
4 All the ladies out there:
Here is the moment u have been waiting 4.
My interview with
Chunglongtung
Heatemydog, Chinese Economix Advisory
“Chung where R u frum?”
I am homegrown frum Heatemydog.
Boogawagrama
Ok , so whatz new longtung?
“Soon Baidu take over Google and merges with BING. ByeByegoogoobing is new website http://www.byebyegoogoobing.com. China will turn NYC into 1 big rice and chicken factory 4 wedding and marriage vows. A world of RICE is so VERY VERY nice. Then yuan bcomes werld currency bcause NYC = PIGG = La Cosa Nostra = SEC + Hedge Funds + Brokerages. Finally, we share NYC PIGG city with N. Korea, Russia, Iran, UK and maybe others. China plant Chinese Flag of Independence in NYC financial PIGG turf and use NYC financial PIGGS in chow mein in new NYC China Town.
Well Thank U longtung. Sounds like a plan. My only advice longtung is 2 always hedge with the anell mustard to glide your assets in2 your best friend Gymmy Kramir’s pockit and account.
Boogawagarama
Well, It is with a tear in Gymmy’s i, 2 sadly say this will EnD tHe wErLd tour and thanks again 4 joining us – it’s been r pleasure. But what a great way 2 END. 2night it’s Daarck Knight, Chunglongtung, and me Gymmy Kramir together 4 an evening. And I’m a monkeys believer now when Daarck sez; “The Midnight is Daarck Knight. There is NO STREET light”.
Everyone; we’ll b signing autographs here, until the anell mustard warms jussssst right and then
it’s time 4 us 2 leave, don’t frown, just put a cocker spaniel down!
as they say here in Heatemydog, cHiNa.
Boogawagarama
As I RIDE on the Chinese Gatling Accupuncture Float in the NYC wEdDinG paRaDE and the NYC financial PIGG float sinks frum treatment, I’ll check out the next update of headline newz TV in Heatemydog, China with the views frum the NYC Ferry.
Now, it’s time 4 us 2 RIDE and RIDE and RIDE
until the chinese sun rises above the NYC Daarckness

June 01 2012 at 7:31 PM Report abuse -2 rate up rate down Reply
GymmyKramir

America and the Werld R clairvoyant
NYC Financial PIGGS
Just like U
JPM just got took by the same NYC PIGGS that take America and the Werld Everyday.
NYC PIGGS = La Cosa Nostra = SEC + Hedge Funds + Brokerages.
The WHOLE world knows there is a PIGG on the planet
and it’s NYC

June 01 2012 at 7:30 PM Report abuse -2 rate up rate down Reply
GymmyKramir

Sell in may and go away.
That’s why Gymmy is in the North Pole.
The next thing that pops
Will not b your stock
LEAVE NYC NOWWWWWWWWWWWWWWWWWWWWWW

June 01 2012 at 7:29 PM Report abuse -1 rate up rate down Reply
GymmyKramir

It’s me Gymmy Kramir LIVE on a Special NYC Madd 4 Your Money show coming 2 U from the stalag of Colonel Klinks in za Republic of Germany on this Friday morning !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Boogawagarama
So many CALLz 4 Gymmy 2 make another stop and this Daarck mark is just getting daarcker on me, so I have extended my werld tour (applause & cheerz) !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
2 visit
the mark of the Deutsch land and Third Reich. Because
Merkel knows.
Boogawagarama
But what does that mean Gymmy?
Well, It’s all about coffee. It must be Daarck and just the right temperature and Merk knows how 2 Perk.
Hey Merk. This is cool. All the sugar packs say: La Cosa Nostra = SEC + Hedge Funds + Brokerages & Congratulations NYC on your wedding day.
Yes. SS printed those 4 the NYC demon wedding and we have a new beer 2. It’s called NYC Shitzenscheister and the label shows me, Emperor Merkel slapping a swastika on NYC financial PIGG.
Gee Merk. Wonder what happens when u add Daarcks mark on top of that 2 NYC?
Anywaze. Your Economy is moving up Merk. What gives?
Lets go up in #99 Red Balloon Gymmy so u can c za German city and I’ll talk trash while u look at it.
Boogawagarama
Yes. We call it SS. SS monitors Supply of Shorty and if running 2 high they get the Gas Chamber; the same 1 Uncle Adolph used after beer, bratwurst and sauerkraut. U C. Germany reduced the Hedge Funds frum a few thousand 2 just 1. Germany decided not 2 play against itself with hand of the PIGG or we bring in SS. 2 easy 2 cheat and we have supporting data from brilliant nephew of Einstein; Adolph Einstein (every boy in Germany is named Adolph). U C Adolph has found the same people cheating in the economy R the same people cheating on spouse. But now spouse stay home and German Economy on fast track just like me and Uncle Adolph after sauerkraut, beer and bratwurst and I get 2 b famous on Gymmy K show 2!!!!!!!!!!!!!!! And as the niece of Adolph it is my duty 2 claim NYC with the German flag and seEgHILE !! sEEgHILE !! sEEgHILE !!
Wow, thanks 4 that pat on the back Merk and R u stirred up or what? yer a cRaZY.
By the way. How high up R we?
Ah. It will not matter after u take this little piece of psychedelic paper. Printed at the U.S. Treasury 2 and friends of Bernadette. I just can’t remember. Either W. Buffet left it or it came out of Ghadafi’s stash. Eh, getting old and just 1 final self promoting word Gymmy. It’s getting close 2 re-election and I just want to ask the voters of Germany 2 vote 4 me or
prefer the gas chamber; seEgHILE!! sEEgHILE !!sEEgHILe!!
Boogawagarama MERK.
U got my vote.
And who wood know better about Beer than U Merk and Germany 2 End 2daze show.
That’s where you’ll find me and Daarck 4 the next few hours after we hit the ground.

June 01 2012 at 7:29 PM Report abuse -1 rate up rate down Reply