THE FACEBOOK IPO IN 2012 AND THE YAHOO IPO IN 1996 CONTINUE THEIR STRANGE RELATIONSHIP
In 1996, I traded the YHOO IPO on the day it went public for clients. I remember the sentiment at the time of its IPO was very similar to FB: Unbounded skepticism, followed by valuation propositions that simply didn't add up, topped off with what seemed like a failed IPO at the time.
In August of this year, after it was clear that the FB IPO was a complete debacle, I decided to do a comparison to the YHOO IPO based on the memory I had of the perceived failure in 1996. The correlation between the two was astounding. I followed up with another study tracking the correlation a month later. Again, astounding.
Here is the third installment of that correlation study, comparing YHOO to FB six months into their respective IPOs along what it means for FB in the months ahead.
click chart to enlarge
YHOO vs. FB IPOs
