tubemogul

TubeMogul Surges 48% In Its Debut After Cutting Its IPO Price

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TubeMogul is having a strong first day of trading as a public company, rising nearly 50 percent in midday trading. The company went public for $7 per share, and is currently trading in the $10.30 range.

The IPO, however, came with caveats. The $7 per share price was dramatically under its initially proposed pricing range of $11 to $13. And, to help get the thing out the door, prior investors had to buy $25 million of the shares offered in the deal.

The moves are interesting in that the company’s initial S-1 document indicated that it would seek to raise $75 million. A figure that was bumped up after it first priced its shares — to more than $90 million. At $7 per share, TubeMogul raised a slimmer $43.75 million.

The basement price of the shares and the use of prior investors to shore up orders were both likely indicative of limited pre-IPO demand for the company’s equity, according to a source with intimate knowledge of the venture capital industry and IPO process. That same individual also told TechCrunch that among many investors, a more conservative outlook on technology shares have become prevalent, especially when compared to market sentiment in early 2014.

I asked the company about the purchase of its IPO shares by prior investors. It responded that the move “shows is that [its] investors are bullish on the long-term future of the company.” Those investors certainly are having a good day.

What is the lay of the land when it comes to TubeMogul’s financials? As TechCrunch reported previously:

It recorded a $7.4 million loss in 2013, the highest of its three reported year-long periods. However, in the first quarter of 2014, the company’s revenue — $22.02 million, up from $9.58 million in the year-ago quarter — came attached to a slim $767,000 loss, down from $1.90 million the year before.

It will be fun to see where this chart goes:

Screen Shot 2014-07-18 at 9.25.56 AM

Post has been updated to include comment from the company. 

IMAGE BY FLICKR USER FRANCK BLAIS UNDER CC BY 2.0 LICENSE (IMAGE HAS BEEN MODIFIED)