It was just over a week ago that the Millennial Media (MM) IPO opened nearly double the IPO price. The stock soared to $28 on high hopes of new investors hoping to capture a part of the fast growing mobile ad market. Now after the first full week of trading, the stock has plunged all the way down to $18.42. What happened? What caused a hot IPO to plunge 26% from the opening day closing price in just a week?
My only guess is that the Samsung (SSNLF.PK) announcement of building its own mobile ad exchange for its wireless devices scared off the enthusiasm for the hot IPO.
Velti Remains More Attractive
To be fair, my recent assessment was that Millennial Media was vastly overpriced and that Velti (VELT) was a much better deal. The recent drop has brought Millennial's valuation more in line with reality, but the impact has also been felt by Velti making it that much cheaper as well. Not to mention, the impact of the Samsung mobile exchange will directly impact Millennial more than a mobile ad agency like Velti.
Read the full article at Seeking Alpha.
Disclosure: Long AAPL and VELT. Please review the disclaimer page for more details.