SAN FRANCISCO (AP) — Add Angie's List to the list of Internet companies now trading below their IPO price.
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 company, which is based in Indianapolis, lost $37 million on revenue of $68 million during the first half of this year.