Inflation concerns and comments from Alan Greenspan contributed to a tough day overall on Wall Street as the Dow fell nearly 2.6 percent and the Nasdaq fell nearly 2.7 percent on Friday. Many Internet stocks were hit especially hard. There obviously isn’t ever a good time to announce bad news, but Friday was a terrible day to do so, as evidenced by what happened to shares of online community site TheGlobe.com (Nasdaq: TGLO).
Shares of TheGlobe.com fell almost 19 percent on Friday, tumbling2-9/16 to 11-1/16 after the company announced that its third-quarter revenue will be below analysts’ estimates, although its earnings will be in line with estimates.
You might remember that TheGlobe.com was the poster child for Internet IPO success when it went public last November. Now, however, the company’s stock isn’t anywhere close to its high of48-1/2 and is just a couple points away from its offering price of $9. What was once a billion-dollar company is now worth less than $300 million. That’s still a lot of money, of course, but TheGlobe.com is one of the clearest examples of how brutal a sell off can be after a stock runs up too much too soon.