The talk of another speculative tech bubble, this time mainly around social media-related stocks, has been going for a while. But it reached new levels when professional social networking site Linked-In IPOed a month ago and its share price promptly doubled.
So all eyes have been on Pandora Media, the company behind the eponymous Internet radio service, which put some of its shares onto the NYSE today. They were priced at the high end of expectations at $14, but opened up 28 percent at $20.50. It was déjà vu time as, within minutes, the share price jumped to over 50 percent of its offer price, but at time of writing it had stabilised at around $20/$21.
Of course all us hacks had our ‘tech bubble goes mental' stories already half written, but speculation seems less feverish around Pandora. Having said that we're still looking at a market cap of around $3 billion for a company that has yet to make a profit.
It has been argued that the current situation is not analogous to the original dotcom bubble because the companies getting all this speculative attention are at least turning-over decent amounts of money, they just haven't turned that into profit yet. This was famously the situation with Amazon for years.
There's a pretty comprehensive debate on whether we're in a speculative bubble or not in the Economist, which you can access here.