1 Follow-On Offering to Dump
After large gains following successful IPOs, it is common for a company to do a follow-on offering, allowing for pre-IPO shareholders to cash out. Recent history in hot Internet follow-on offerings have signaled a top in the stock, at least temporarily.
While most would debate if the IPO was really successful, currently hot Facebook (NASDAQ: FB ) announced plans to sell 70 million shares by the company and its shareholders. The leading social media firm follows other hot social media stocks, including LinkedIn (NYSE: LNKD ) and Yelp (NYSE: YELP ) that had similar offerings. Those stocks have underperformed the markets in the months following the related offerings.
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