Groupon IPO
One of the things that the stock market has taught us, is that one company can influence an entire sector. When one company is so strong, or weak for that matter, it can either create rising stocks in a particular group, or a bunch of dogs.
Well, in this case, it’s probably fairly safe to say that there will be a ton of hype and anticipation of the Groupon IPO. Although no date is set, valuations have ranged between $15 and $25 billion, according to news sources.
Both Groupon and Net Savings Link (CXLT:OTC.BB) both operate collective buying websites. And yes, there are a ton of these companies popping up. However, there is still an opportunity for a sympathy trade in this hot penny stock if the anticipation in the Groupon offering continues to grow. Remember, Groupon turned down a bid from Google (GOOG:NASDAQ) for $6 billion in December. By no means am I trying to compare the business model of CXLT ot Groupon’s, but with that being said, there could be an opportunity for a trade in a low priced penny stock.
Some other recent examples of larger stocks creating other rising stocks, are Molycorp (MCP:NYSE) and General Motors (GM:NYSE). I can’t tell you how many times I heard people telling about some previously illiquid rare earth penny stock that made a huge percentage move on the back of Molycorp’s furious run into the 50′s. On a more conservative note, Ford Motor Company (F:NYSE) made a decent percentage move based it’s comparison to General Motors, but it was right before GM did it’s IPO. Many people thought F was cheap in comparison to GM. And guess what ? Ford went higher.
So take a look at CXLT in the next few months. The stock is extremley liquid, and despite it dropping sharply from it’s high, CXLT could provide at least an opportunity for a quick penny stock scalp. So add it to your list of stocks and research it further, especially the technicals.
Also follow Groupon’s news flow. I am pretty sure that CNBC and Bloomberg will provide plenty of background the closer we get to the IPO. And if the story keeps getting better, you could see CXLT return to it’s super hot penny stock status.
Stay tuned for more penny stock alerts, IPO market news, and our weekly stock market report.
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