OpenTable prices IPO at $20 a share, topping expectations

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Shades of the good old days in Silicon Valley: Online restaurant-reservations firm OpenTable Inc. today priced its initial public stock offering at $20 a share, exceeding the $16-to-$18 range its underwriters had set.

And that $16-to-$18 estimate had been raised on Tuesday from $12-to-$14, indicating that investor demand for the stock was robust.

The shares will begin trading Thursday on Nasdaq under the symbol OPEN. The IPO buyers undoubtedly are expecting a big pop in the price, even after (or particularly after) paying $20.

The San Francisco company’s IPO is being closely watched in Silicon Valley because it would be the smallest new stock offering to come to market this year. If it flies, it could open the door for other relatively young but promising companies to tap the equity market.

Founded in 1998, OpenTable lost $1 million last year on sales of $56 million. Sales have doubled since 2006 as the company’s listings have expanded to cover more than 10,000 restaurants, each of which pays a fee for each diner seated via an OpenTable reservation.

Some analysts have raised concerns about betting on the restaurant business for growth, given the struggling economy. But OpenTable obviously did a great job pitching its business plan in its roadshow presentation to investors.

The public bought 3 million shares in the IPO, about half sold by the company, the other half by insiders cashing out. Merrill Lynch & Co. was the lead underwriter.

Another IPO also came to market this week: SolarWinds Inc. -- which despite its name is a network-management software company, not a green-energy firm -- sold 12.1 million shares late Tuesday at $12.50 each, exceeding its estimated range of $9.50 to $11.50. The stock, under the symbol SWI, jumped to close at $13.75 today, a 10% gain from IPO price.

SolarWinds was just the sixth IPO in the U.S. market this year.

-- Tom Petruno