What’s going on with IPOs?
Host Lauren Lyster posed that questions to Breakout host Jeff Macke and Leigh Drogen, CEO of Estimize. Weibo (WB), dubbed the Chinese version of Twitter, began trading today. The company, which is owned by web-portal Sina (SINA), raised $286 million, less than expected and priced its IPO at $17, near the low end of the range. Sabre (SABR), the parent company of travel website Travelocity, also made its stock market debut today. It sold 39.2 million shares at $16. The company was expected to sell 44.7 million shares in the $18 to $20 range.
Lyster asked if the lackluster performance of other IPOs in the last few weeks is due to less of an appetite for risky stocks.
“They’re offering not very good companies for really high valuations,” Macke said of recent IPOs. He cautioned that it’s not an IPO bubble, because if it were, investers wouldn’t have “run away” from LaQuinta Holdings (LQ), which debuted last week at $17 a share, below the expected $18 to $21 range.
Drogen said Weibo's pricing below its expected range has to do with the Street looking for user growth from Twitter (TWTR) instead of revenue growth. Drogen said that is insane. “You saw they priced [Weibo] on the low end and they didn’t get as much out."