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GoDaddy soars on IPO, should you buy? Pros divided

GoDaddy soared more than 30 percent in its market debut Wednesday, leaving the pros split on whether they should get in on the action or sit on the sidelines.

The Web hosting company priced its initial public offering at $20 per share, above the expected $17-$19 range. It closed Wednesday at $26.06.

Despite that run, James Ramelli, a trader with Keene on the Market, thinks the stock still has a lot more upside.

"GoDaddy has a whole new suite of products that they're offering to existing and new costumers. Their revenue growth over the past three years has been red hot. They are an older, more established company," he said in an interview with "Closing Bell."

Blake Irving, CEO of Go Daddy, during the IPO at the New York Stock Exchange, April 1, 2015.
Brendan McDermid | Reuters
Blake Irving, CEO of Go Daddy, during the IPO at the New York Stock Exchange, April 1, 2015.

However, for Jason Rotman, president of Lido Isle Advisors, GoDaddy is a "bad investment."

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He called the stock's performance Wednesday "classic first-day euphoria" and believes it will settle back down around the $18-$20 range.

The company's biggest problem, he said, is that it is losing money: $200 million in 2013 and "a little bit less" last year.

"Why would anybody invest in a company that is losing hundreds of millions of dollars per year?" Rotman asked. "GoDaddy, in my opinion, has zero moat of safety around their business model. It's only going to get more competitive."

That unprofitably doesn't worry Ramelli, who said that Yelp lost money in 2013 through early 2014 yet its stock went from $20 to $100 a share.

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As for the competition coming from the likes of Google and Amazon, he thinks it could be a concern for investors, but thinks GoDaddy can handle it.

"GoDaddy has been around for a while and they have a huge core customer base. They have over 13 million customers in 40 countries around the world and they're managing over 60 million domains," Ramelli said.

Plus he thinks their new products should continue to drive revenue growth.

Disclosure: Ramelli and Rotman do not own GoDaddy.

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