LOS ANGELES – Wall Street may have had its fill of new Internet-related stocks for the moment.
Shares of online radio firm Pandora Media Inc. plummeted on their second day of trading Thursday as investors suddenly fled for the exits.
The stock had soared as high as $26 on Wednesday, its first trading day, mirroring the debuts of other new Internet issues this spring, including LinkedIn Corp., Chinese social networking site Renren Inc. and Russian search engine Yandex.
Investors' hunger for the current crop of Internet stocks has echoed the late-1990s dot-com boom, although the market today seems far less frothy than the worst excesses of the dot-com era.
Still, rushing to buy the stocks just as they hit the market has proved to be a fool's game, a point that seemed lost on investors who crowded into Pandora on Wednesday.
Last month, LinkedIn and Yandex both pulled back in their first few days of trading from their highs, although those stocks still are above their IPO prices.
On Thursday LinkedIn tumbled $6.35, or 8.5 percent, to $68.27, but the stock remains 52 percent above its IPO price of $45. The shares rose as high as $122.70 when they began trading May 19.
Yandex edged up 26 cents to $30.53 on Thursday. It's down 27 percent from its peak of $42.01 on May 24, its first trading day, but up 22 percent from its IPO price of $25.
Pandora's crash was much more spectacular. It's typically a black eye for a company, and its Wall Street underwriters, for a new stock to fall below the IPO price soon after it begins trading.
"It seems like a lot of these deals are being rushed out at levels that aren't the right spot" to sustain gains, said Larry Peruzzi, a senior equity trader at Cabrera Capital Markets in Boston.
Pandora had expected to go public at $7 to $9 a share, then raised the expected range to $10 to $12 last week. Apparently facing strong demand, the company's underwriters boosted the IPO price to $16 when the deal was launched Tuesday.
Pandora has attracted more than 90 million registered users to its personalized radio service. But the 10-year-old company still hasn't turned a profit, an issue heavily discussed in stories about the business this week. That may have encouraged more investors to abandon the stock once they saw it losing altitude at a fast pace in the first two trading days.
The stock held around the IPO price of $16 for much of Thursday, suggesting that the company's underwriters were stepping in to support it. But the price crumbled in the final 90 minutes of trading.
It was a down day for many Internet-related stocks in general. Renren sank 74 cents, or 9.8 percent, to $6.78, continuing its recent meltdown. Google Inc. slipped $2.58, or 0.5 percent, to $500.37, its lowest price since September.
And after the closing bell, BlackBerry maker Research in Motion Ltd. shares sank after the firm gave a disappointing sales forecast. The stock slumped to $30.43, down 14 percent from Thursday's closing price of $35.33.