Tech Stocks After The Fall

In October, it was easy for me to write “The Next Stock Market Bubble” about social media stocks like LinkedIn and the heavily overvalued names in the Social Media X (SOCL) Fund that were trading at over 100x earnings, had trouble developing anything resembling consistently growing profits, and stood to dilute shareholders along the journey.

It is a far more difficult question for me to figure out whether a social media stock has fallen enough in price to be worth absorbing the risk of meandering profit growth, substantial stock ownership dilution, and the business model uncertainty that comes with the tech territory.

For instance, online reviewer Yelp (YELP) has fallen 4% today following a UBS downgrade in which the bank pointed out the difficulties Yelp has in growing its market and even greater difficulty in attracting significant employee talent because those with programming and social media savvy would … Read the rest of this article!