Angie's List Shares Jump More Than 40% in IPO

By Features FOXBusiness

Shares of consumer Internet site Angie’s List (NASDAQ:ANGI) surged more than 40% Thursday in their debut on the Nasdaq Stock Market.

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The company runs a subscription-only web site that allows consumers to post and access reviews of local service providers – contractors, doctors, plumbers and the like.

The company priced 8.8 million shares at $13 late Wednesday, the high end of its pricing range, an indication of strong demand, and opened trading Thursday at $18. After climbing as high as $18.75, the shares have since fallen to $16.85.

Knee-jerk demand for consumer-related IPOs has boosted the first-day trading prices of companies such as Angie’s List and Groupon (GRPN), which debuted earlier this month. Neither company is turning a profit.

In the case of Angie’s List, analysts have expressed concerns that the company needs to pump a significant portion of its revenues into marketing in order to raise awareness and attract more subscribers.

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The company said in regulatory filings ahead of its IPO that subscribers recently surpassed one million, up from about 560,000 a year ago.

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Groupon’s business model has been under scrutiny for months, with some analysts questioning how and if the online discount coupon company can ever make any money.

Nevertheless, shares of online-related IPOs continue to attract strong demand, at least early on.

Angie’s List raised $114 million through its IPO, which was managed by Bank of America (BAC).

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