Why Angie's List Shares Got Clipped

Before you go, we thought you'd like these...
Before you go close icon

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of review-based website Angie's List (NAS: ANGI) were looking for a fix today, falling as much as 19% on what appeared to be a tandem play after Groupon's (NAS: GRPN) earnings report came up short.

So what: Social media stocks were down across the board as Facebook (NAS: FB) dropped 4% and Yelp (NYS: YELP) fell 5%, while Groupon got hit the hardest with a 25% drop. Investors were particularly concerned with Groupon's slowing growth, which could signal general saturation on social media platforms. Still in the red after nearly 20 years, Angie's List is particularly susceptible to these concerns as it will need to grow its top line appreciably if it hopes to turn a profit. The company posted a disappointing earnings report of its own last week as net income dropped 44% to -$23.4 million for the quarter.


Now what: Of the recent social media stock IPOs, Angie's List is the worst in my opinion. The company is still a money pit after nearly two decades in business, and seems particularly vulnerable to Yelp, which offers free access as opposed to Angie's List's subscription-based model, and should therefore generate more content from its users.

If there's ever been a stock shouting "RUN" at investors, this is it.

If you're a jilted Facebook investor who's wondering if it's time to cut your losses, I recommend taking a look at ourbrand-new in-depth premium reporton the social networking king. Our top tech analyst will present you the opportunities and risks in Facebook's stock as well as all the other important details you need to understand this juggernaut and where it's going. Best of all, it comes with a year's worth of updates so you can stay on top of any developing stories and quarterly reports during Facebook's first year as a public entity. All you have to do is clickright hereto get started today.

The article Why Angie's List Shares Got Clipped originally appeared on Fool.com.

Fool contributorJeremy Bowmanholds no positions in the companies above. The Motley Fool owns shares of Facebook. Motley Fool newsletter services have recommended buying shares of Facebook. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners