Fear of a new Internet bubble has intensified after the shares of the online music service Pandora (NYSE:P) rose sharply by 60% at the opening session on Wall, informs Financial Times.
Pandora Media, which operates several Internet radio stations, has attracted 235 million dollars through an initial public offering conducted this week in New York. The price places the U.S. company’s value at $2.5 billion, informs Reuters.
After the 170% growth of LinkedIn (NYSE:LNKD) shares last month, experts fear that a combination of ignorance of some private investors and Wall Street financial opportunists is feeding an unsustainable growth in some IPOs.
“Given what happened to LinkedIn, a lot of exuberance was created around these actions”, declared, for the Financial Times, Lise Buyer, a consultant on IPOs in Silicon Valley.
Other sought after IPOs, such as Renren (NYSE:RENN), known as China’s Facebook, dropped considerably. Renren shares that were sold initially for $14 rose to $24 at the beginning of the month, then fell afterward to below $8. Also, LinkedIn shares fell by 39% from the peak.
Pandora shares fell to $17.42 by the closing session of the New York Stock Exchange, almost twice the price of $9 which company officials said they expected, two weeks ago.
The high interest for Pandora shares comes in despite of the situation that it failed to gain profit in 10 years of existence, and about half of sales revenue goes to the music companies.