Zillow IPO Debuts as One Hot Stock
The sluggish housing market isn’t making investors shy about snagging stock in Zillow. Zillow Inc.‘s IPO made a strong debut on the NASDAQ Stock Market Wednesday, as shares of the real estate Web site’s stock quickly tripled during its first trading day to reach $60, valuing the company by as much as $1.6 billion.
Zillow (which is trading under the symbol Z) had originally set a price of $20 for its stock on opening day. Shares rose as high as $60 during its debut, but by close on Wednesday had settled to $35.77.
Some analysts were surprised that Zillow, which has never made a profit, was off to such a soaring start. However, analysts note that Zillow may be benefiting from being the first to the stock market in its niche, and the company offered relatively few shares for trading.
Zillow was founded in 2004 and provides online listings for more than 100 million homes and boasts a feature called a “Zestimate” for estimating property values.
“Investors are very keyed up on business models that integrate the Internet into their main platform and have mobile apps,” David Menlow, the founder and president of research company IPOfinancial, told the Associated Press.