Sometimes a IPO company stock falls to one-half of its initial public offering issue price in the first 6-12 months. .
Notice I am not mentioning Facebook or Zynga specifically and this is not a buy recommendation on any stock.
This may be an opportunity.
Consider, the company just got in a huge chunk of cash. They will of course spend much of this, we hope it will be spent in a manner that increases value.
Time to get out the quarterly statements and calculate the cash per share and the other valuation metrics.
If you see signs of a bottom, if the insiders are starting to buy, you might consider a trade in these "fallen angels" as the IPO premium is gone if the price is down 50% in less than one year.
This assumes the price did not crash because of some discovered fraud or other catastrophe.
These stocks are worth a look.
Consider also the short interest that may or may not be there.
Do not buy any stock still in a declining trend -- avoid these falling knives and look for technical signs of a solid bottom on the chart.
