Angie's List shares rise on upgrade
NEW YORK (AP) — Shares of Angie's List Inc. rose on Wednesday, after an analyst said the stock's low price bodes well for investors, since the company has strong growth prospects.
THE SPARK: Angie's List, an online review Web site, went public in November, and the lock-up period, when shareholders aren't allowed to sell shares, ended Aug.14. Since then, the stock has plummeted 32 percent. But one analyst says that's the reason why shareholders should snap up the stock, since it has multiyear growth prospects.
THE BIG PICTURE: Tech startup IPOs have had a rocky road over the past few months, with highly anticipated debuts from several companies, including Groupon Inc. and Facebook Inc., fizzling.
THE ANALYSIS: Oppenheimer analyst Jason Helfstein lowered his price target on the stock to $15 from $17. But that's still 66 percent higher than the stock's closing price Tuesday of $9.03.
He said Angie's List can sustain growth if it cuts its marketing expenses. And now that the lock-up period has expired, there is likely to be less volatility of share movement.
Helfstein raised his rating to "Outperform" from "Perform," based on the opinion that Angie's List is a better bargain than its peers.
SHARE ACTION: Shares rose 89 cents, or 9.7 percent to $9.92 at midday, after earlier spiking to $10.02. The stock debuted at $13 in November and closed its first trading day at $16.26. It jumped as high as $19.82 in late March, but has fallen since then.