zipcar, the car-sharing service, launched its ipo yesterday. the company had a target of $14 to $16 per share (p/s) - but participants paid roughly $18 p/s in the initial stock offering, raising $174 million, and shares rocketed to nearly $30 p/s once the offering was opened to the public, valuing the company at $1.2 billion.
a few thoughts:
- why was there such a large price disparity between the initial stock and public offerings? did the underwriters flip the ipo or were they unaware of the demand?
- the service is very capital-intensive in an "infant industry" - but after ten years, the company has yet to post a profit even though its growth has been impressive.
- should i invest in zipcar? after all, i am technically a "zipster" because i don't have a car and frequently patron the zipcar service.
i love public companies; i'm weary of ipos, especially ones that involve short-term fads (looking at you). i don't necessarily think zipcar is a fad, but i definitely agree that it's in a specialized, concentrated market.
count me out for now, but i am intrigued and will look at the company's financials after a few quarters. i'll be looking for a smaller expansion rate, glimmer of profitability, and the impact of market competitors.
one thing's for sure, i do like the ticker.
