If you followed the downward trend of tech stocks like LinkedIn, Pandora, and Zillow in the media yesterday, chances are, at some point, you had to avert your eyes. USA Today uses no less than four foreboding verbs to describe how all three newly-public tech companies performed Monday after the S&P demoted America’s credit rating down to AA+:
“Shares of professional social network LinkedIn plunged 17%, to $75.47. Internet radio company Pandora tumbled 8% to $12.49. Real estate website Zillow crumbled 7% to $26.09. That came as the Dow skidded 635 points.”
Based on just that day of trading, Geoff Yang, a partner a Redpoint Ventures, told the paper, “The sound you just heard was the IPO window slamming shut.”
Nevermind then, we guess, that LinkedIn has already seen big fluctuations in its share price, which dropped as low as $63.71 back in June. Or that both LinkedIn and Pandora stock suffered in July months after their IPOs. No, the narrative we’re being told is that these tech stocks were “a bright spot” and are, as of yesterday, a blight for other start-ups hoping to go public. Scott Kessler, S&P’s head of equity research for the technology sector, told USA Today, “The reality is that it is definitely a different market than we had a month ago, and companies have to proceed differently.”
Get ready for all the hand-wringing over whether or not we’re in a bubble to pivot toward whether or not we’re headed for a bust.