By Gerry Shih and Sarah McBride | Reuters –
SAN FRANCISCO (Reuters) – Social media companies, once hailed by their Silicon Valley boosters as world-changing businesses with limitless potential, are instead proving a sobering reminder of how investors can be seduced by Internet hype.
With a few exceptions, the first wave of social media firms to trade on the public markets has delivered a disastrous performance that conjures memories of the dot-com bust of 2000.
“Farmville” publisher Zynga, which went public in December at a valuation of $7 billion (4.4 billion pounds), is trading around $3.15 a share, more than 68 percent off its $10 IPO price.
Daily deals site Groupon, touted as the firm that could reinvent local commerce, has fallen from its $20 IPO price to about $7.15 in nearly nine