YuMe Inc. (YUME) is supposed to be in a hot space for digital video brand advertising solutions, but its initial public offering (IPO) is coming with some mixed fanfare. YuMe sold some 5,125,000 shares of common stock at $9.00 per share, and the company is selling all the shares itself rather than insiders and VC-backers cashing out as we have seen in so many other offerings.
Citigroup, Deutsche Bank Securities and Barclays are acting as joint book-running managers for the offering. The co-managers were Needham & Company and Piper Jaffray. The underwriting syndicate has been granted a 30-day option to purchase up to an additional 768,750 shares of common stock at the IPO price, although we would point out that the shares allocated for overallotments actually are from certain selling stockholders.
What investors need to know here is that this is a small uptick in shares, but it is a huge drop in the price. Originally the price range was $12 to $14 per share, so a $9 share price is not going to be the most exciting price for the company. That being said, apparently investors are treating it as if the stock went on sale, because YuMe shares are trading up 5.5% at $9.50 on almost 500,000 shares as of 9:48 a.m. EST.
There is a solid list of venture capital players behind YuMe. Its investor site shows Accel Partners, BV Capital, DAG Ventures, Intel Capital, Khosla Ventures, Menlo Ventures, TransLink Capital, Samsung Ventures and WestSummit Capital as backers. YuMe launched an advertising technology solution in 2007 to properly monetize, distribute, traffic and report against digital video.