EDITORIAL

The Trade Desk Spikes 60% After Raising Its IPO Price

Editor’s Morning Note: The American tech IPO window is wide open to healthy companies. Maybe that’s why there are so few offerings.

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After raising its IPO range from $14 to $16 per share to $16 to $18 and picking the $18 final price, The Trade Desk saw its equity skyrocket in its first day’s trading as a public company.

The Trade Desk, trading under the ticker symbol TTD, opened at $28.75, up a smidge under 60 percent.

Here’s what that looks like in active figures:

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Few things are more beautiful than a security you own not only become liquid, but more valuable at the same time.

The ad-tech firm sold 4,666,667 in its IPO. According to BusinessInsider, the company’s strong opening momentum put “The Trade Desk’s market cap north of $1 billion.”

Do we care? Should this result delight private companies who before looked only askance at the public markets? We very much care, and very much this should delight, but we need to caveat before we cavort.

Good, But Hang On

It’s good for technology IPOs that The Trade Desk has had a good first day. It preponders well for Apptio later this week, and it also helps set the terrain favorably for other firms in the wings, like Nutanix.

However, we must keep in mind that the company is a bit different from other offerings that are coming up. The Trade Desk not only generates operational cash flow, but has real GAAP profits that it has earned over a multi-year period. And it has nice amounts of revenue growth attached to its results, making it a full package.

That’s why it’s different from other companies looking to go public, and why we cannot overextend its success as grounds to presume that other upcoming IPOs will do well. Twilio is the other example here. It’s IPO was smashing, and the company had huge amounts of revenue growth coupled to falling GAAP losses. Investors liked it. Nutanix has half of that, making its offering more interesting.

Though, I am hearing bullish mutterings about the Nutanix IPO, so we’ll see. I have no real view of how well it should do, assuming fair pricing.

Regardless, the first benchmark result of IPO week is hugely positive. On to the next.

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© Mattermark 2017. Sources: Mattermark Research, Crunchbase, AngelList.
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