SHARES of real estate and housing data company Zillow tripled in value on their debut, after pricing above their expected range, as investors buoyed by a wave of successful internet IPOs shrugged off its ties to a weak housing market.
Zillow’s initial pop in value overtook internet-and-IPO darling LinkedIn’s first-day share rise. LinkedIn only doubled in value in its first day of trade.
Seattle-based Zillow offers rent and house price estimates as well as real estate data on millions of US homes through its websites and mobile phone applications.
The shares were also boosted by a recovering advertising market, Zillow’s primary source of revenue, its strong hold in a niche segment and deals with companies like Yahoo.
“Their revenue has increased nicely and their losses have come down nicely. They’re not profitable yet. They have signed a collaborative agreement with Yahoo that will help their bottomline as well,” Scott Sweet, senior managing partner at IPO Boutique, said.
Zillow -- which had 22m unique users visiting its website and mobile applications in May -- halved its losses in 2010 and posted revenue of $30.5m (£18.9m) last year, up nearly 75 per cent from a year ago.
Though Zillow’s shares pared most of their initial gains, they closed at $35.77 – more than 79 per cent above their listing price, giving the company a market value of about $940m.
Zillow is currently trading at more than 30 times revenue.
FAST FACTS | ZILLOW
● Zillow is the American equivalent of Britain’s Rightmove online real estate service
● The firm trades on more than 30 times revenues and is not yet profitable
● 22m users visited the site in May