TECH STOCKS: Facebook, LinkedIn Fall Ahead Of Twitter IPO
By Dan Gallagher and Benjamin Pimentel, MarketWatch
SAN FRANCISCO (MarketWatch) -- Social media stocks, led by Facebook and LinkedIn, slipped Wednesday, weighing down the tech sector, ahead of the expected pricing of Twitter's initial public offering.
Facebook (FB) shed 2% to close at $49.12, while LinkedIn (LNKD) was off 1.7% to close at $220.78 to highlight downbeat trades for social networking sector. Shares of Groupon (GRPN) were off 2.7% to close at $10.01, while Yelp (YELP) gave up 6.4% to close at $66.61 and Zynga Inc. (ZNGA) shed 2.5% to close at $3.71 as the spotlight turned to another social media player's upcoming trading debut.
Twitter (TWTR) was expected to set a final IPO price late Wednesday and being trading Thursday. The Wall Street Journal reported Wednesday that the company was likely to raise its price range again to $25 to $28, after raising it earlier this week to $23 to $25.
Reactions Twitter's public trading debut have been mixed, with some analysts warning against too much hype similar to what happened during Facebook's controversial IPO in 2012.
But on Wednesday, Topeka Capital's Victor Anthony stuck to a bullish view of Twitter which he has given a pre-IPO rating of buy with a $54 12-month price target. Twitter is still unprofitable, but Anthony and other analysts have pointed to the company's growth potential amid the rapid growth of the digital ad market.
"Consensus has underestimated social media financial performance," Anthony told clients in a Wednesday note. "Hence, we stand by our numbers, which are largely above official and unofficial estimates."
The Nasdaq Composite Index (RIXF) shed 0.2% to close at 3,932, while the Morgan Stanley High Tech 35 Index (MSH) and the Philadelphia Semiconductor Index (SOX) were each up a fraction.
On the upside, shares of Microsoft Corp. (MSFT) jumped 4.2% to close at $38.18 after Reuters reported late Tuesday that the company has narrowed down its "shortlist" for CEO candidates, which reportedly include Ford (F) chief Alan Mulally and former Nokia (NOK) CEO Stephen Elop. Former Skype CEO Tony Bates is also reportedly on the list of candidates. The candidates are being considered to replace outgoing chief Steve Ballmer.
Also, Nomura analyst Rick Sherlund raised his price target on the stock, citing the potential for a new leader and reorganization "potentially extracting a lot more value out of the current assets." He raised his price target to $45 from $40, still rating the shares as a buy.
"We believe many investors are effectively being caught 'off sides' on Microsoft, still focusing on what could go wrong with the fundamentals, rather than what could go right with new management and likely changes in cost structure, disposition of money losing consumer businesses Bing and Xbox, corporate governance changes and financial engineering potentially extracting a lot more value out of the current assets," Sherlund wrote. "The harder issue will be repositioning the product portfolio to address faster growth opportunities for the enterprise cloud businesses and what it means to deliver innovative new consumer productivity products."
Qualcomm (QCOM) shares edged higher by 1% to close at $69.74 ahead of the company's fiscal fourth-quarter report, due after the close.
Activision Blizzard (ATVI) shares traded flat closing at $16.53. The company reported that "Call of Duty: Ghosts" has sold more than $1 billion into retail stores in its first 24 hours after the launch of the latest iteration of the blockbuster first-person shooter franchise. However, the company's statement Wednesday morning differs from launch figures from previous year's releases; Activision said last year's "Call of Duty: Black Ops 2" sold through more than $500 million to end customers in its first 24 hours.
"Although it is too early to assess sell-through for Call of Duty: Ghosts, it's launching at a time when the franchise has never been more popular," Bobby Kotick, CEO of Activision Blizzard, said in Wednesday's statement. Activision also reports quarterly results after the closing bell.
Apple (AAPL) shares slipped by a fraction to close at $520.92. The Wall Street Journal reported that the company has lined up new contract manufacturers to increase production of its iPhones and iPads.
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By Dan Gallagher and Benjamin Pimentel, MarketWatch
SAN FRANCISCO (MarketWatch) -- Social media stocks, led by Facebook and LinkedIn, slipped Wednesday, weighing down the tech sector, ahead of the expected pricing of Twitter's initial public offering.
Facebook (FB) shed 2% to close at $49.12, while LinkedIn (LNKD) was off 1.7% to close at $220.78 to highlight downbeat trades for social networking sector. Shares of Groupon (GRPN) were off 2.7% to close at $10.01, while Yelp (YELP) gave up 6.4% to close at $66.61 and Zynga Inc. (ZNGA) shed 2.5% to close at $3.71 as the spotlight turned to another social media player's upcoming trading debut.
Twitter (TWTR) was expected to set a final IPO price late Wednesday and being trading Thursday. The Wall Street Journal reported Wednesday that the company was likely to raise its price range again to $25 to $28, after raising it earlier this week to $23 to $25.
Reactions Twitter's public trading debut have been mixed, with some analysts warning against too much hype similar to what happened during Facebook's controversial IPO in 2012.
But on Wednesday, Topeka Capital's Victor Anthony stuck to a bullish view of Twitter which he has given a pre-IPO rating of buy with a $54 12-month price target. Twitter is still unprofitable, but Anthony and other analysts have pointed to the company's growth potential amid the rapid growth of the digital ad market.
"Consensus has underestimated social media financial performance," Anthony told clients in a Wednesday note. "Hence, we stand by our numbers, which are largely above official and unofficial estimates."
The Nasdaq Composite Index (RIXF) shed 0.2% to close at 3,932, while the Morgan Stanley High Tech 35 Index (MSH) and the Philadelphia Semiconductor Index (SOX) were each up a fraction.
On the upside, shares of Microsoft Corp. (MSFT) jumped 4.2% to close at $38.18 after Reuters reported late Tuesday that the company has narrowed down its "shortlist" for CEO candidates, which reportedly include Ford (F) chief Alan Mulally and former Nokia (NOK) CEO Stephen Elop. Former Skype CEO Tony Bates is also reportedly on the list of candidates. The candidates are being considered to replace outgoing chief Steve Ballmer.
Also, Nomura analyst Rick Sherlund raised his price target on the stock, citing the potential for a new leader and reorganization "potentially extracting a lot more value out of the current assets." He raised his price target to $45 from $40, still rating the shares as a buy.
"We believe many investors are effectively being caught 'off sides' on Microsoft, still focusing on what could go wrong with the fundamentals, rather than what could go right with new management and likely changes in cost structure, disposition of money losing consumer businesses Bing and Xbox, corporate governance changes and financial engineering potentially extracting a lot more value out of the current assets," Sherlund wrote. "The harder issue will be repositioning the product portfolio to address faster growth opportunities for the enterprise cloud businesses and what it means to deliver innovative new consumer productivity products."
Qualcomm (QCOM) shares edged higher by 1% to close at $69.74 ahead of the company's fiscal fourth-quarter report, due after the close.
Activision Blizzard (ATVI) shares traded flat closing at $16.53. The company reported that "Call of Duty: Ghosts" has sold more than $1 billion into retail stores in its first 24 hours after the launch of the latest iteration of the blockbuster first-person shooter franchise. However, the company's statement Wednesday morning differs from launch figures from previous year's releases; Activision said last year's "Call of Duty: Black Ops 2" sold through more than $500 million to end customers in its first 24 hours.
"Although it is too early to assess sell-through for Call of Duty: Ghosts, it's launching at a time when the franchise has never been more popular," Bobby Kotick, CEO of Activision Blizzard, said in Wednesday's statement. Activision also reports quarterly results after the closing bell.
Apple (AAPL) shares slipped by a fraction to close at $520.92. The Wall Street Journal reported that the company has lined up new contract manufacturers to increase production of its iPhones and iPads.
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
