If you want to understand how quickly things can turn for the worse in the Internet sector, all you have to do is take a look at last month’s highest-profile initial public offering.
On July 21, investors would have jumped at the chance to buy shares of the MP3.com (Nasdaq: MPPP) IPO at the offering price of $28. Well, investors can now pay even less for the stock, but you don’t exactly see people lining up to do so. Shares of MP3.com fell 3-1/4 to 26-3/4 on Monday.
The stock traded as high as $105 on July 21, but it has been on a steady decline ever since. Hype obviously helped carry this stock to an unsustainable valuation. The scary thing for investors is that MP3.com may not have hit bottom just yet. MP3.com is still worth nearly $1.8 billion, which is still a rather rich market value for a company that had just $1.9 million in revenues and a net loss of $6.5 million in the second quarter.
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