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Angie’s List shares plunge to record low after lockup ends

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Add Angie's List Inc. to the list of Internet companies now trading below their IPO price.

Indianapolis-based Angie's List's stock broke the barrier Tuesday as investors fretted about a potential wave of selling by major shareholders of the online business review service.

The worries stemmed from the expiration of a ban that had prevented the owners of 25.2 million shares from selling their stock until Tuesday.

The restrictions on about 44 percent of Angie's List's outstanding stock helped boost the company's stock by limiting the number of shares trading on the market.

Stripped of that protection, shares of Angie's List Inc. shed $2.12 to close Tuesday at $11.17. That left the shares below their initial public offering price of $13. Tuesday's 16-percent drop marks the biggest one-day decline in Angie's List's shares since the company's stock market debut nine months ago. It also represents Angie's List's lowest closing price so far.

Angie's List is just one of several Internet companies that are proving to be more popular among Web surfers than stock pickers.

Other Internet companies trading below their IPO prices include online social networking leader Facebook Inc., online coupon seller Groupon Inc. and Web game maker Zynga Inc.

Those three companies, all better known than Angie's List, have been absorbing an even more painful beating on Wall Street. Facebook's shares have fallen by 46 percent from their IPO price of $38, while the stocks of Groupon and Zynga have plummeted by about 70 percent.

Groupon's shares sagged to a new low Tuesday as investors digested the latest round of lackluster financial results posted by the company. Facebook's stock will face another major test later this week when selling restrictions on some of the company's major shareholders, including Microsoft Corp. and Goldman Sachs Group Inc., are scheduled to expire.

A few Internet companies have emerged as wining investments. The stock of online professional networking service LinkedIn Corp. has more than doubled since its IPO 15 months ago, while shares of online real estate service Zillow Inc. have surged by more than 80 percent. The market value of Yelp Inc., which runs a review service that competes against Angie's List, has climbed by about 50 percent since its IPO.

Angie's List is still trying to prove it can consistently make money by selling online ads and charging people to see its website's A to F ratings on a wide range of local businesses.

The compan lost $37 million on revenue of $68 million during the first half of this year.

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  • Last one out...
    Hey Angie, would you ask the last one out to turn off the lights? What a scam, Tim Durham would be proud!
  • Predicted This Disaster
    I warned investors of this Ponzi Scheme months ago. The claims made in print, radio, and televisions ads, that you cannot pay to be on Angie's List are absolute lies. I was told by a company representative that "The more I spent on ad space, the higher my company name would appear on the Angie's List Search Results", in other words, the company representative said that most people never go beyond the first page of "Contractor Search Results". This company will fail as more insiders and venture investors dump their holdings. This was a great stock to short early on, and it remains a good stock to short, all the way down. By the way Douglas, Nostradamus stated a fact, Angie's List may not be in business on the 1ST Anniversary of the company's public offering. When insiders and early venture investors are dumping, they must know something.
  • Oh really!?!?
    You didn't think the company model was a little suspect, contractors paying a.l. for advertising, Oh really!?!? Here kids if it sounds to good to be true, well you know the rest. Can you say pump and dump?
  • Another IPO to kill a company
    Without big revenue opportunity before IPO, IPO = Public Shareholders = Short Term Goals = Dead Company. Simple equation, works every time. Too bad, AL was a good idea but they hound me for Ad sales now almost as much as the Yellow Pages folks.
  • Rankings no longer credible
    Agree totally with NewIndy. Angies List no longer credible. Companies at the top of the list must pay fees to be at the top. Good companies who refuse to pay fees even with "A" rating will fall to bottom of list.
  • Run, run, run!
    Watch Oesterle and Hicks sell off and sell off quickly! They need to suck all the money out while they still can. This IPO only came about because they could no longer find any VC's willing to throw good money away. This IPO will be a future lesson in how to run a legal ponzi scheme for future finance students!
  • What goes up....
    Unfortunately, here is an example of what a company should NOT have done. Greed works in mysterious ways.
  • What goes up....
    What goes up eventually comes down and this business gives a highlight to what a company should NOT have done. Greed works in mysterious ways!
  • MEJ
    because they are markketing in-house and not tapping in to the local agencies that have the data and research and talent to make informed marketing campaigns
  • Advertising Supported
    Unfortunately, the consumer-ranked listing model has shifted to advertising-supported ranking. Companies that pay ad $ to Angies List are now ranked at top of Angie Lists website w/ coupons. Disappointing - would sell stock if had any.
    • Business Model is Sketchy
      Lay persons' reviews of the work of dentists, roofers, and other skilled crafts are sketchy and not reliable, in my view. There are often unforeseen complicating factors that could result in additional delays, expense and problems. I wouldn't necessarily trust a negative review. On the other hand, sometimes the biggest scammers are polite and deferential, but this doesn't mean they did a good job.
    • Angies List
      I agree D Karr, however they need to get their conservative heads out of where-ever and start marketing to the right people, young exec's that don't have time or knowledge to do home repairs etc, and why no smart phone app for ease of use?
      • It's a Tea Party
        Me buy stock because me likey the donations to GOP candidates. Der dee dum.
      • Prediction
        The post is a sign of things to come. The company may well not be in business on the one year anniversary of its IPO. The company has never made money and is blowing through cash at an alarming rate. If you own it I would really like to know why.
      • New Low?
        What a ridiculous post. They haven't even been public for a year yet!

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