YuMe, a leading online video advertising network, traded flat today in its market debut, despite pricing well below its initially proposed range and at a large discount to close peer Tremor Video (TRMR), which has traded off almost 20% since its June IPO. The stock broke early this morning, trading as high as $9.74, but pared its gains in the afternoon to end the day flat at $9.00. YuMe is the fourth company in the online digital advertising market to go public since 2012; its predecessors (TRMR, MRIN and MM) have all traded down since their IPOs.
Ad tech companies like YuMe and Tremor address the large, fast-growing online video ad market, but their poor IPO performances indicate that investors are still unclear as to who the winners will be in this new and highly fragmented space. Recent flops from YuMe and Tremor could negatively affect prospects for the growing group of ad tech companies on our Private Company Watchlist, and we may see increased consolidation activity within the industry as these companies weigh alternatives to initial public offerings. YuMe competitor Adap.tv (ADTV.RC) announced this morning that it has been acquired by AOL for $405 million, and Exponential Interactive (EXPN), an ad tech that had submitted an initial filing in March of 2012, withdrew its filing this afternoon, citing poor market conditions.
| Recent "Ad Tech" US IPOs Have Flopped | |||||
|---|---|---|---|---|---|
| Company (Ticker) | Offer Date |
Deal Size ($mm) | First Day Return | Total Return | |
| YuMe (YUME) | August 6, 2013 | $46 | 0% | 0% |
|
| Tremor Video (TRMR) | June 26, 2013 | $75 | -15% | -19% | |
| Marin Software (MRIN) | March 21, 2013 | $105 | 16% | -13% |
|
| Millenial Media (MM) | March 28, 2012 | $133 | 92% | -37% |
|
