Angie's List Shares Jump More Than 40% in IPO
Shares of consumer Internet site Angie’s List (NASDAQ:ANGI) surged more than 40% Thursday in their debut on the Nasdaq Stock Market.
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 (NASDAQ: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.
The company said in regulatory filings ahead of its IPO that subscribers recently surpassed one million, up from about 560,000 a year ago.
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 (NYSE:BAC).