Zillow completed its initial public offering, listing its common stock on the NASDAQ exchange at $20 a share.
The opening price was higher than the company’s first pricing estimate of $12-$14 per share and the later raised estimate of $16-$18 Zillow reported in a Securities and Exchange Commission filing last week.
In the opening hours of trading Wednesday, Zillow's stock soared as high as $46.56 per share and was trading near $38 at noon Eastern time.
At the midpoint price of $17 per share, Zillow would have raised $56.8 million after underwriting discounts, fees and other IPO-related costs—up from the $51.75 million it originally proposed raising when it first
The real estate listing and mortgage rate search website firm listed just under 3.5 million shares of Class A common stock. Concurrent to the IPO, Seattle-based Zillow will privately place approximately $5.5 million of its stock with existing investors, at a price per share equal to the initial public offering price.
The company generates revenue by selling home listings and loan rate advertising to real estate and mortgage professionals, and generates consumer traffic with its free automated valuation model. However, Zillow has never posted an annual net profit, losing more than $20 million in both 2007 and 2008. The company's net loss of $6.77 million in 2010 was 47% lower than its net loss of $12.85 million in 2009 and its 1Q11 net loss of $826,000 was down about 70% from its 1Q10 net loss of $2.8 million.
Citigroup is the IPO’s underwriter, with four co-managers: Allen & Co., Pacific Crest Securities, ThinkEquity, and First Washington Corp.
Zillow stock trades under the symbol “Z” and CEO Spencer Rascoff rang NASDAQ’s opening bell Wednesday morning.
After the IPO and private placement, Zillow expects to have 17.43 million outstanding shares of Class A common stock, which could increase to 17.95 million shares if the underwriters exercise an over-allotment of 519,300 shares.
Company founders Richard Barton and Lloyd Frink will continue to control all of the approximately 9.5 million shares of Zillow’s Class B common stock, which has a voting power of 10 per share, compared to Class A’s one-to-one voting power. Barton and Frink will control 46.8% and 37.8%, respectively, of the total voting power for both classes of stockholders.
Revenue has increased from nearly $4.3 million in 2006 (its first year of operation) to $30.5 million in 2010, including a 74% year-over-year increase from 2009 to 2010. Revenue for the first quarter of 2011 was $11.26 million, up from $5.33 million in 1Q10.
April’s IPO registration brought to light
