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Hold your horses of the Internet apocalypse

November 25, 2011: 10:06 AM ET

Did you hear? The tech bubble has burst. Seriously. Just before noon on Wednesday, when Groupon (GRPN) began trading below its $20 per share IPO price.

Don't take my word for it. Gawker says so. The New York Times does too, albeit in less hyperbolic terms.

It's the biggest tech catastrophe since Kozmo.com stopped delivering Krispy Kremes to shut-ins on the Upper East Side. If you're holding stock in an Internet company that went public in 2011, get ready to claim a capital loss. If you are holding stock in a private Internet company, don't even bother lining up IPO underwriters. Maybe -- and this is a best-case scenario – you can unload your position via Craigslist, under the heading: "Interested in aughts memorabilia?"

Is my sarcasm coming through clearly enough?

Clearly it was a miserable week for Groupon, which saw its shares fall around 30% between last Friday and market close Wednesday. And for LinkedIn (LNKD), which lost around 11% over the same period – largely driven by insiders dumping shares after the lockup expired.

But let's put all of this in context: Both the Dow and Nasdaq were off more than 4% during the same period. So was the S&P 500. Moreover, Groupon is just three weeks removed from a massively-successful IPO while LinkedIn is still trading at a P/E ratio that would make Google or Wal-Mart blush. And didn't companies like Angie's List (ANGI) recently list despite a notable lack of profit?

In arguing for the existence of a tech bubble earlier this year, I was careful to note that we shouldn't put too much emphasis on the fortunes of any one company (i.e., single data points). The same thing goes for their misfortunes.

It is entirely possible that we're beginning to see the beginnings of tech bubble deflation, but can't we at least wait for some sort of critical mass before pulling out the undertaker outfits? Might Groupon not be given at least one full quarter of public life, or the opportunity to see what insiders do at lockup? Shouldn't we see how Zynga fares in its own public debut next week? Are IPO prices really the benchmark by which we're going to judge companies, when we all admit that they are manipulated by bankers in the first place?

Hysteria might make for good headlines, but it makes for lousy analysis.

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About This Author
Dan Primack
Dan Primack
Senior Editor, Fortune

Dan Primack joined Fortune.com in September 2010 to cover deals and dealmakers, from Wall Street to Sand Hill Road. Previously, Dan was an editor-at-large with Thomson Reuters, where he launched both peHUB.com and the peHUB Wire email service. In a past journalistic life, Dan ran a community paper in Roxbury, Massachusetts. He currently lives just outside of Boston.

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