Autobytel Is Off and Running on 1st Day of Trading
Autobytel.com, a money-losing Irvine firm that is seeking to capitalize on consumers’ growing acceptance of using the Internet to buy things, went public Friday and saw its shares soar 75%.
The 4-year-old company’s stock offering raised $103.5 million on a day that saw most other technology stocks fall. Its shares, which were priced at $23 on Thursday night, rose as high as $58 before closing at $40.25 by day’s end on Nasdaq.
That values the company, which lost $19.4 million on sales of $23.8 million in 1998, at $719 million.
Online car-selling services such as Autobytel charge dealers for leads on car buyers and also make money through advertising on their Web sites.
Increasingly, people are turning to these services not only for information on what car to buy, but also how to finance, insure and sell it. The free Web sites also offer reminders when cars need servicing and alert owners to manufacturers’ recalls.
“If they play their cards right, buying a car through them will only be a small part of what they do,” said James McQuivey, an analyst with Forrester Research in Cambridge, Mass.
Autobytel’s debut capped a weeklong series of initial public offerings by “.com companies,” as Internet stocks have come to be known.
On Tuesday, one of its chief rivals, Santa Clara-based Auto-web.com, saw its stock nearly triple in first-day trading, closing at $40. By the week’s end, it had settled at $32.75, valuing the company at $768 million. Autoweb.com lost $11.5 million last year, on sales of just over $13 million.
On Wednesday, MiningCo.com Inc., a search service that employs human guides to help users find information on the Internet, raised $75 million and watched its stock more than double from $25 to $59.
On Thursday, OneMain.com, an Internet service provider for rural areas, raised $187 million and saw its shares climb to $39.56 from $22.
Even companies whose businesses are only tangentially related to the Internet had extremely successful coming-out parties.
On Friday, Woodland-based Valley Media, which distributes music and video to retailers in both the virtual and real worlds, sold $56 million in stock. Its shares jumped 63% to $26 before settling at $20.13, a more modest 26% gain.
“There’s an increasing view that a dot-com anything is still viable, but that whole theme is going to get old very quickly,” said David Menlow of IPO Financial Network. “There is still much more of a demand than a supply for these stocks, and until it swings back, pretty much any dot-com will work.”
Autoweb’s strong debut prompted Autobytel.com to twice raise its price from an initial range of $16 to $18 to the eventual $23.
Of the $103.5 million raised in Autobytel’s offering Friday, the company received about $80.5 million. Company founders Peter Ellis and John Bedrosian each sold 500,000 shares worth $11.5 million.
