October 2, 2022

DealBook: Shares of Zillow Soar 90%

4:08 p.m. | Updated

Not even the weak housing market can slow down the rush for Internet stocks.

Shares of Zillow, the online real estate information company, soared nearly 79 percent in its stock market debut on Wednesday, closing at $35.77. The company, which set its initial public offering price at $20, traded as high as $60 earlier in the day.

Demand for shares of Internet companies has reached a fever pitch in recent months, raising questions about whether this boom could be a bubble. The professional social networking site, LinkedIn has more than doubled, since going public earlier this year. Investors are eagerly awaiting the public offerings sector’s biggest players like Facebook and Groupon.

Like other Internet companies, Zillow has upsized expectations about its initial public offering. Originally, the company had set its price range at $12 to $14 a share, later increasing it to between $16 and $18. It finally landed at $20.

But as with peers, Zillow — a combination of the words “zillion” and “pillow” — is still struggling to be profitable. The company reported a loss of $6.8 million in 2010, according to its recent regulatory filing.

Still, the company is growing. Zillow revenues increased 74 percent, to $30.5 million. Earlier this year, Zillow entered into a partnership with Yahoo! Real Estate and acquired Postlets, a real estate listing service.

Citigroup was the underwriter on the offering.

Article source: http://feeds.nytimes.com/click.phdo?i=e54731b1f597d250cafd7bedf43b1fad

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