The Wall Street rumor mill has been working overtime during the past month. Just a week after shares of Salesforce (CRM) popped double-digits following a report that the company was preparing to sell itself for $55 billion, shares of Yelp (YELP) jumped nearly 30% for the same reason.
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Yellen Fails At Social Media
In her semi-annual Congressional testimony, on July 15, Federal Reserve Board Chairwoman Janet Yellen targeted Wall Street hype, and the valuations of social media stocks, claiming that they are “substantially stretched [in price].” Wall Street’s predictable reaction to this statement sent social media stocks tumbling, as investors feared Yellen was implying the formation of an imminent bubble.
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Investors Hungry For IPOs
In the midst of an abysmal past two weeks on Wall Street, a mobile food ordering app, GrubHub (GRUB), went public. Last Friday (April 11) CEO Matt Maloney overlooked the NYSE trading floor to witness the results of his company’s IPO. Initial investor demand was so high that the company raised its initial offering target price from $20-22 to $23-25, and saw its stock shoot up 50% to $39 before eventually ending the day around $34.
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