One year ago, the hype around the Facebook Inc (NASDAQ:FB) IPO would have led one to think that this was the stock to retire on. We all know how that bust ended. The stock went down the toilet, and has only bubbled up a few times.
In spite of Facebook’s notorious IPO, it was not the worst Web 2.0 publicly traded debutante. That honor goes to Groupon Inc (NASDAQ:GRPN). Groupon opened at $27.44 in November 2011, dropped as much as 80% over the next year, and has eked its way up to $7.14, still down 64% from its opening. The 52-week range is currently $2.60 – $12.74.
Groupon’s 2013 first-quarter earnings have helped it improve. Its revenue was significantly higher than expected with $601.4 million in sales, up from $559.3 million the year-ago quarter. However, in the previous quarter (2012 fourth quarter), Groupon reported an operating loss of $19.9 million.
Also on the dubious list of Web 2.0 IPO flops is Yelp Inc (NYSE:YELP). Within weeks of its IPO, the stock dropped 40%, but has since climbed its way back up to 30% higher than where it began. The company reported a 68% increase from the year previous with $46 million in net revenue the first quarter. CEO Jeremy Stoppelman announced during the earnings call that the company had hit record highs in all core metric areas.
Yelp’s average monthly unique visitors grew 43% to 102 million. Local business accounts are now around 45,000, a 63 percent increase year over year; and the number of reviews increased 42 percent from the year previous. Yelp shows positive indications for continued customer growth, as well as business client growth.
One year later, how does Facebook Inc (NASDAQ:FB) compare to these other IPO flops? Facebook beat Wall Street revenue estimates in its first quarter with $1.45 billion in revenue. The stock, which debuted at $38 per share, is now around $27 per share, down 29% since the day of its IPO. Not quite as bad as Groupon, but not quite as good as Yelp.
It’s all about mobile
All three companies have one important developing metric that they must focus on – mobile revenue. According to the Interactive Advertising Bureau (IAB) Internet Advertising Revenue Report for 2012, Internet advertising revenues in the United States totaled $36.6 billion for the full year of 2012. Mobile advertising in the United States totaled $3.4 billion during the full year 2012, a 111% increase from the prior year total of $1.6 billion. Mobile revenues totaled 11% of fourth-quarter 2012 revenues, or $1.2 billion. According to the Pew Internet & American Life Project, 85 percent of U.S. adults own a mobile phone (46 percent of which are smartphones).