A Look at the Tech IPO Class of 2011 as Pandora and Groupon CEOs Resign

Michael Teague |

PandoraThe internet radio company Pandora (P) held its initial public offering in 2011, along with a groups of internet businesses. Revenue for the quarter was $125.1 million, a non-GAAP loss of $0.04 per share, but topping analyst expectations of $122.81 million, or $0.05 cents per share. The Q4 revenue figure represents a 54 percent increase on the same period the year prior.

More impressive, however, was the growth in revenue from mobile devices: $80.3 million in Q4, an increase of 111 percent on the year prior. Listeners clocked in a total of 4.05 billion hours, up 53 percent from the year before. The company claims to be the largest radio station in most American markets, with 67 million monthly listeners, or eight percent of all radio listening.

The company closed Thursday edging just upwards of 0.50 percent to $11.73 per share, and even as CEO Joseph Kennedy somewhat abruptly announced his resignation, shares skyrocketed in late trading with the release of earnings, gaining over 21 percent and pushing the stock’s price over $14.20 per share.

The announcement came unexpectedly, given that Kennedy took the company public after assuming leadership in 2004, and in under a decade has helped to grow the company into its current form. Neither the board’s nor Kennedy’s statements have indicated any reason for the resignation, but he is staying on until the company locates a successor.

Kennedy’s own statement was perfectly equivocal: “As part of our Board discussions of the road that lies ahead, I reached the conclusion and advised the Board that the time is right to begin a process to identify my successor.” The board, for its part, had nothing but praise for Kennedy’s work as CEO, and sidestepped any attempt to explain the reasoning behind the move.

The resignation contrasts sharply with the ousting of Groupon, Inc.'s (GRPN) CEO and founder Andrew Mason last Thursday. Mason was largely credited with the company’s dismal performance over the last year, and framed his departure as a sacrifice for the good of the company before taking his leave with a severance check totaling a famed $376.36.

Both companies began publically trading in 2011, part of a class of internet-based business whose entry into the market was highly anticipated that year. The following is an incomplete list of these companies, and a brief overview of how they are performing today:

Pandora Media Inc. (P) – The company IPOd on June 14th of 2011, and currently has a market cap of $2 billion, and, as previously mentioned, close Thursday up 0.51 percent to $11.73 per share. Their year-to-date performance is up 27.78 percent.

Groupon Inc. (GRPN) – The online coupon company IPOd on November 3rd of 2011, with a market cap currently at $3.49 billion, and stocks performing a bit better since CEO Andrew Mason’s departure last week. At closing, shares were up 0.38 percent to $5.32. Their YTD performance is 9.47 percent.

LinkedIn Corp. (LNKD) – The social media/business networking site made entered the market on May 18th of 2011, and currently has a market cap of $19.12 billion. Up nearly one percent by closing to $175.36 per share, and with a YTD return rate of 52.73 percent, LinkedIn has been perhaps one of the biggest success stories of the 2011 class so far, and has shown no signs of slowing down in 2013.

Angie’s List Inc. (ANGI) – The business and services database on November 16th of 2011. With a market cap of $1.11 billion, the company’s stock was up 4.82 percent on Thursday to $19.13. Their YTD return rate is impressive so far at 59.55 percent. Back in January of this year, the company announced its new CEO J. Mark Howell would be starting work on the 1st of this month.

Zillow Inc. (Z) – The online real-estate brokerage site IPOd on July 19th of 2011, and is another success story. Their market cap is at $1.69 billion, and though the company closed today at a loss of 0.92 percent, $49.68 per share, their YTD performance is currently almost 80 percent. Along with their main competitor Trulia, they are currently riding the upwardly inclined housing trend that is taking place at the moment, but has also drastically changing the way homes are bought and sold.

Zynga Inc. (ZNGA) – The online video-game website has had a good deal of trouble since it IPOd on December 15th of 2011. Its market cap is currently $2.77 billion with shares trading at $3.53 (up 0.28 percent by closing). The YTD return rate is nearly 50 percent, but 2012 was rough, and until a decent fourth quarter earnings report just came out, there was some talk about an ouster of CEO Mark Pincus

FriendFinder Networks Inc. (FFN) – The ostensible social networking site has all but tanked since its IPO date on the 10th of April, 2011. With a market cap of $21.98 million, and stocks trading at $0.67 per share, the company has been in decline for most of its existence. While the company’s return rate for 2013 is at 8.85 percent, for the past year this figure is in the negative by nearly 57 percent.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
ALB Albemarle Corporation 81.70 0.95 1.18 1,351,216
ANGI Angie\'s List Inc. 10.05 -0.20 -1.95 173,941
GRPN Groupon Inc. 5.18 -0.14 -2.63 3,571,219
LNKD LinkedIn Corporation Class A 193.04 0.25 0.13 2,258,080
P Pandora Media Inc. 13.99 -0.10 -0.71 3,591,139
Z Zillow Group Inc. 35.10 -0.12 -0.34 488,859
ZNGA Zynga Inc. 2.83 -0.01 -0.35 14,559,505

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