Within an hour of beginning trading on NASDAQ at $31 per share, CRTO jumped 33% to $41. The price puts its market cap is $2.26 billion -- about on par with Rocket Fuel -- and gives it approximately $228 million in public money financing, which it will spend on capital expenditures and, potentially, acquisitions.
The early pop echoes Rocket Fuel's experience. After going public at $29 on September 20, FUEL's share price more than doubled to $62 by late morning on that day. Since then it has fallen back slightly to $56.95 at a $1.85 billion valuation, as of this morning. Rocket Fuel enjoyed a small bump in its stock price immediately after Criteo began trading.
The pre-Halloween debut is appropriate, as Criteo's IPO is scary to some.
Some worry that the overwhelming interest in FUEL and CRTO could fuel an ad-tech IPO bubble -- with a small legion of startups rushing to file S-1's. If today's corpulent valuations hold, the appeal of public markets could prove stronger than a merger or sale for a lesser sum.
Despite the similarities in Rocket Fuel and Criteo's businesses (both have data and algorithms "under the hood"), there are key differences. Rocket Fuel enjoys larger gross margins (approximately 56% to Criteo's 35%), but Criteo has strong client relationships. Among the details touted on its IPO roadshow: More than 76% of revenue comes from customers with open budgets. That means that, unlike Rocket Fuel, it may be less reliant on renewing insertion orders on a monthly or quarterly basis.
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