The Most Disappointing IPOs Of The Past Year

Published on Saturday, 09 June 2012 22:52 Written by Todd Shriber

Despite a 3% pop for the stock on Friday, it’s still safe to say that Facebook’s (NASDAQ: FB) IPO is the most disappointing of the past year. In other words, Facebook has gone from being the most anticipated IPO to come out of Silicon Valley since Google’s (NASDAQ: GOOG) in 2004, to being the most over-hyped, overrated and utterly disappointing offering in recent memory.

Amid concerns about the company’s high valuation and slowing growth, shares of Facebook have plunged 29% since their debut last month. The thing is Facebook, the largest social media company, hasn’t been the only disappointment on the IPO front in recent months. Facebook merely has the burden of being the most recognizable flop. Here are some other companies that might wish they had just stayed private.

Groupon (NASDAQ: GRPN):

Groupon’s problems have been obvious. Not only did the daily deal Web site manage to run afoul of the SEC regarding its accounting practices quite early in its young life, the company also operates in a business where there are almost no barriers to entry. Those two factors are enough to explain why the stock has plunged almost 59% since its November 2011 debut.

Zeltiq Aesthetics (NASDAQ: ZLTQ):

The maker of weight-loss products has seen its share plunge more than 72% since the company’s October 2011 IPO. With a market cap of just under $145 million, Zeltiq is now a micro-cap stock.

Pandora (NYSE: P):

Pandora, which provides online music services, has started to show some signs of life recently, soaring almost 18% in the past month. That’s a good thing because the stock has tumbled almost 37% in about a year since its IPO.

Vanguard Health Systems (NYSE: VHS):

Tennessee-based Vanguard Health Systems looks like it’s becoming the latest in a long line of hospital stocks to struggle. The stock is a dangerous bet at the moment because it is viewed as a potential loser should Obamacare be struck down. A decision by the U.S. Supreme Court is expected any day now this month. Should Obamacare be upheld, that might lead to a near-term pop for Vanguard Health, which has seen its shares fall more than 55% since their June 2011.

Caesars Entertainment (NASDAQ: CZR):

As the epitome of discretionary plays, casino stocks have seen their fair share of volatility this year. The problem for Caesars, which went public in February, is its balance sheet. Even though it’s a smaller company than say Las Vegas Sands (NYSE: LVS) or Wynn Resorts (NASDAQ: WYNN), it has a debt load that is suffocating and alarmingly high. That makes Caesars a high risk/high reward play and one that’s hard to embrace at the moment. The stock has lost almost 22% since its IPO.