Zillow, Skullcandy IPOs Price Above Expectations
High-profile real estate website Zillow and headphone vendor Skullcandy both priced initial public offerings at higher-than-expected prices.
Zillow priced its IPO at $20 a share. The Seattle company had originally hoped to price its 3.5 million shares at $12 to $16 a piece, but upped the price by $4 per share last week. It will make its debut on the Nasdaq on Wednesday morning under the symbol “Z.”
Skullcandy also priced at $20 a share. The Park City, Utah, company sold more IPO shares than it had originally anticipated in an offering of 9.4 million shares. The company had expected to sell just 8.5 million shares in a range of $17 to $19.
IPO experts had expected both companies to price well.
“Given where we are in the macro economic cycle, classic growth stories are resonating well with investors, particularly companies that are approaching new industries, and have a product that is in high demand,” said Paul Bard, research director at IPO research and management firm Renaissance Capital. And in his view, Zillow and Skullcandy fit the bill.
Founded in 2004, Zillow is probably best-known for its "Zestimate," a proprietary home-valuation model it uses to provide estimated property values.
Zillow’s database holds information on more than 100 million U.S. homes, including homes for sale, homes for rent and homes not currently on the market.
Its free website attracted an average 17.3 million monthly unique users for the three months ended March 2011, an increase of 86 percent over the year-ago period, according to Renaissance Capital.
The company generates its revenue from subscriptions from real estate and mortgage professionals, as well as from brand advertisers. Zillow booked $36 million in sales for the 12 months ended March 31, compared to $17.5 million in 2009.
Skullcandy was founded in 2003 and booked $175 million in sales for the 12 months ended March 31, 2011, according to Renaissance Capital. It will trade on Nasdaq under the symbol "SKUL."