Facebook, Yelp, recent Internet IPOs buck downturn

Despite market turmoil, recent IPO'd Internet stocks are showing positive returns, so far in 2014

Financial trends and news by Steven Loeb
October 18, 2014
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2014 has seen a slew of high profile companies going public, or at least filing to.

IPOs have included Candy Crush maker King, food delivery service GrubHub, video ad platform TubeMogul, online caregiver platform, cloud-based customer service software provider Zendesk, high-definition personal camera manufactuerer GoPro, digital coupon provider, online automotive information communications platform TrueCar and Chinese e-commerce giant Alibaba.

Others that have filed include cloud storage company Box, Web-hosting and domain registration company GoDaddy, inbound marketing software platform HubSpot., online home furnishing company Wayfair, online marketing and advertising company Yodle, online dating website Zoosk and online credit marketplace Lending Club.

But given the market turmoil, will these companies push through with an initial public offering? After all, based on the overall market decline - the DJIA is down from the start of the year - it doesn't seem there's appetite.

Yet if you were to have invested in a basket of Internet companies at the start of the year, you would have done very well, as Facebook is up 37%, Trulia is up 25% and Yelp is up 2%. And, in fact, if you look at the market value those three companies created since going public in 2012, it's $89.46 billion.

In fact, 2012 was the year of the largest IPO  ever, until that point, with 128, four times as many as we saw in 2008. So let's take a look at that class of 2012 and where they are now.  

  • Facebook

Let's start with the most high-profile IPO from 2012 that everyone remembers best: Facebook. It was the largest of all time, at least until Alibaba's last month.

The company raised $2.2 billion and closed at $38.37 on its first day of trading, just shy of 1% above the $38 IPO price. It had a market cap of  $104 billion.

The company then had what Mark Zuckerberg would later call an "extremely turbulent" first year as a public company, with investors becoming skittish over the company's long-term mobile prospects. It hit a low of less than $19 a share in September 2012.

Since then, Facebook has figured out how to capitalize on advertising and mobile, and the company has rebounded nicely.

It is now trading at $75.34 a share, up over around 37% since the beginning of the year and almost double its IPO price. The NASDAQ, meanwhile, is only up 2.07% in the same timeframe.

Facebook's current market cap is $188.84 billion

  • Yelp

Yelp had a pretty fantastic opening day in March of 2012, rocketing 64% to close at $24.50, nearly $10 above its $15 IPO price. It raised $107.3 million on a market cap of $1.43 billion.

After that, well, things didn't go so well. The stock was stuck in the doldrums for a while, hitting a low of $15.22 in June of 2012. In fact, the stock would not even hit $30 until June of 2013, but after that it took off like a rocket following better than expected revenue numbers. 

In March of this year it hit $98.04 a share, its all time high for the company.  Since then it has come back down and is now trading at $67.09 a share, up around 2% from the $67.92 it started out this year with. The New York Stock Exchange, however, is actually down 1.44% since the  beginning of the year.

Right now Yelp has a $4.84 billion market cap, compared to only $489.20 million for Angie's List, which went public in 2011. 

  • Workday

HR Software Workday ended its first day of trading in October 2012 at $48.69, more than $20 higher than its initial pricing of $28. It raised $637 million. It's market cap was $7.7 billion..

Since then, the company has seen a steady rise in its stock price, almost never going below its opening day closing. The lowest it has gone is $46 in November of 2012.

It surpassed $100 a share in February, hitting a high of  $115.47 that month. Since then  it has settled down to the high $70 to low $80 range. It is currently trading at $82.97 a share, up just slightly from $81.77 at the beginning of the year. It trades on the NYSE, which is down 1.44% since the  beginning of the year.

The company currently has a marketcap of $15.42 billion, significantly lower than its traditional competitor Oracle, which has a marketcap of $166.44 billion.

  • ServiceNow

ServiceNow climbed 37% in its first day of trading in june 2012, ending at $22.83, more than $4  above itas $18 IPO price. The platform-as-a-service provider of IT service management software raised $210 million. It had a market cap of $2.17 billion.

Like Workday, Servicenow's stock price  has  never dipped below its first close. The stock hit a high of $70.81 in March of this year, and is now trading at $60.38 a share, up around 9%  since the beginning of the year.  It trades on the NYSE, which is down 1.44% since the  beginning of the year.

It's market cap now stands at  $8.34 billion.

  • Kayak

After some delay, travel search engine Kayak finally went public in July of 2012, closing at $33.18 a share,  27% more than its starting price of $26. the company raised $91 million. It's market cap was $1.27 billion

Then, just four months later, there was a big surprise: Kayak was bought by Priceline.

The merger was completed in May 2013, for $522.4 million in cash and approximately 1,519,717 shares of common stock at $40 a share. In all, Priceline paid $1.8 billion in the deal. 

Kayak was subsequently taken off the public market.

  • Shutterstock

The stock photo company had its  debut in October of 2012, closing at $21.66 a share, above its $17 IPO price. It raised $76.5 million. It's market cap was  $558.3 million.

Shutterstock is another company that  never dipped below its opening day price, only going as low as $21.79 in November of 2012.

The  company topped $100 a share in February of this year, peaking at $102.84. It is now trading at $69.87, down 16% from $83.03 at the beginning of 2014, but still more than quadruple its IPO price.  

The company has a market cap of $2.47 billion, compared to the $742.78 million market cap of its traditional competitor Kodak.

  • Trulia

Real estate marketplace Trulia debuted on the Nasdaq in September of 2012, ending its first day at $21.95 a share, above the $17 IPO price. It raised $102 million in the offering. It's market cap was $449 million.

The stock dipped at first, hitting a low of  $14.69 in November, and not reaching $20 again until January 2013. The stock has remained as a relatively middling performer, except for a  brief patch from July of this year until September, when it went above $40 for the only time. The stock hit a high of $65.04 in July.

It currently trades at $43.83, up 25% from $35.21 a share at the beginning of the year.

Trulia's market cap stands at $1.66 billion.

  • Brightcove

All the stocks I've covered so far have been successes, so I was bound to find a dud eventually. It's only  a coincidence that it's the last one on the list. 

Online video platform Brightcove went public in February of 2012, ending trading at $14.30 a share, above its $11 IPO price. The company raised $55 million. It's market cap was $290 million.

The company did alright for a while, hitting a peak of $24.85 in March of 2012, but it's all been downhill from there. It dipped below $20 a share in April, and then below $10 a share in November of that year.

It went above $10 again in late 2013, hitting a high of $15.76 a share in November, before it came back down  again. It once again went  below $10 a share in February on the news that co-founder and CEO Jeremy Allaire was leaving (he has since opened a new digital currency platform called Circle).

It is currently trading at $5.22 a share, losing around 63% of its price since the beginning the year at $14.01.

Brightcove has a market cap of $179.50 million.

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