Another internet icon made its sharemarket debut overnight, with world famous travel advisory site Trip Advisor making its debut on the NASDAQ in what was a relatively hype-free float.
The business was owned by travel booking site Expedia, which has done pretty well out of the spin-off in that TripAdvisor’s market value of $US3.7 billion is almost exactly the same as that of Expedia. Some great value unlocking there!
But investors didn’t exactly rally around the shares of Trip Advisor, which is infamous for containing some of the snarkiest user-generated reviews of hotels on the web.
Trip Advisor priced the shares at $US30.25, but they fell to around $27 before finishing the day at $28.70 – about 5% down for the opening day.
The underwhelming response comes just a week after a similar response to the float of social gaming giant Zynga, which floated at $US10, but fell on the first day of trade and is now trading at around $US9.79.
Shares in Groupon remain above water, but only just. The company’s shares were listed at $US20 and jumped in initial trade to as high as $US32. However, it’s been one way traffic since then, with the shares now back at $23.
Music and media service Pandora floated in June and its shares have also been sold down. The company hit the boards at $US16 and raced up to $US26. However, the shares are now trading at around $US9.79 after sustained selling.
The real star is LinkedIn, which floated in May in a spectacular IPO that saw its shares race from an issue price of $US45 to a staggering $US94.25 at the end of one day of trade. However, some of the gloss has come off in the intervening months, with the shares now trading at around $US62.40.
Now, it must be remembered that shares markets have taken a tumble since the middle of the year when fears about Europe started weighing even more heavily on the minds of investors.
But it does seem that the bubble-like conditions we saw around the tech sector have cooled, as have valuations. Investors have taken a closer look at the business models behind these companies as the hype has diminished.
With Facebook considering a float next year, it will be interesting to see how they approach the issue of timing. Will they wait for the bubble to gently re-inflate or take a more long-term view and not worry about investor sentiment?
Roll on 2012.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
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