ZipRealty Shares Up 25% in Debut Session

Times Staff Writer

ZipRealty Inc. was one of Wall Street’s hot properties Wednesday as the residential real estate brokerage rose more than 25% in first-day trading.

The stock’s debut was buoyed by investors’ enthusiasm for the recently revitalized IPO market and the still-vibrant housing market.

“It benefited from both,” said Sal Morreale, who tracks initial public offerings for Cantor Fitzgerald.

Emeryville, Calif.-based ZipRealty is an online firm that helps consumers buy and sell homes at a discount. It became one of the few publicly traded real estate brokerages operating in the highly fragmented industry -- one with a market capitalization of $236.4 million.


Trading on Nasdaq under the symbol ZIPR, the stock opened at $17; it closed the day at $16.30, a 25% premium over its higher-than-expected $13 offering price.

The company, which operates in a handful of states including California, raised about $59 million in the offering, which it said it would use for working capital and general corporate purposes. It also said it might use the funds to acquire other businesses.

ZipRealty earned $2.3 million in the first nine months of this year, and is on track to turn a profit in 2004 after racking up losses each year since its founding in 1999.

Its first-day performance on Wall Street “indicates that the IPO market is strong,” said Tom Taulli, co-founder of, a Newport Beach-based research firm.


That bodes well for, a Bellevue, Wash., online real estate firm that recently declared its intent to go public. Unlike ZipRealty, HouseValues directs consumers to other brokers rather than brokering transactions itself.

“The combination of being an Internet company involved in the housing market and the renewed appetite for IPOs,” Taulli said, “is the best of all possible worlds for these companies.”