This has always been the case with IPOs. The fact of the matter is that 80% of initial public offerings end up losing value. The investors end up losing money most of the time.
If you go back two or three years you can find articles about how there is another technology bubble underway.
So, what has happened? Zynga went public, its stock lost money. Groupon went public, its stock lost a whole bunch of money. Facebook went public, its stock lost money.
The big investment firms know that most IPOs lose money. Most mutual fund managers know this, too. Yet, they keep pumping money into them and I can't figure out why.
Within the past 52 weeks, Groupon's stock hit a high of $31.14 a share right after its IPO. Last Friday it closed at $7.59 a share. The stock has lost 75% of its value from its post-IPO high. Any sucker who bought at the high price and still owns that turkey has lost a fortune!