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Trade Desk Inc (NASDAQ:TTD) Shares Soar Roughly 60% on First Trading Day, Raising IPO

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Shares of the ad-tech business skyrocketed as it made its initial public offering, sending strong positive vibes across the market

Trade Desk Inc. (NASDAQ:TTD) fueled the resurgent equity markets reserved for initial public offerings with a strong opening in the stock market. The analysts observed its shares skyrocketing only in the first day of the trade session. The company recently raised the price range for its Class A common stock from $14-16 to $16-18. Just before the open, the shares were offered to the public at $18 per share, at the higher-end of its range. The shares that could be bought by the public amounted to 4,666,667 shares. Surprisingly, the shares opened for trading at $28.75 in the market, sending its initial public offering up by roughly 60%, showing immense potential for the investors.

For this initial public offering, the joint book-running managers included RBC Capital Markets, LLC, Jefferies Group LLC (NYSE:JEF), and Citigroup Inc. (NYSE:C). On the other hand, Raymond James Financial, Inc. (NYSE:RJF) and Needham & Company were the co-managers for the offering. Moreover, the underwriters were granted with a 30-day option whereby they could purchase further 700,000 if it is Class A common shares from few of the selling stockholders.  

The ad-tech business was seen as being highly attractive. It is a technology company that has given empowerment to advertising buyers. It provides the ad buyers with a self-service platform that enables them use their own teams to manage the data-driven digital advertising campaigns. These teams could be spread across multiple advertising formats which may include video, display, and social. The ads are also available on various devices including mobile devices, TVs, and personal computers.

Moreover, it earned healthy revenues in FY15 amounting to $113.8 million. Also, the spending in programmatic advertising also increased in the industry. The increase depicted a strong growth rate of 40% year-over-year in FY15 from $10 billion to $14 billion. Not only this, the business also generated healthy net income of $15.9 million in FY15 compared to just $5000 in FY14. The adjusted EBITDA for the same year was $39.2 million compared to FY14’s EBITDA of $5.7 million. The investors were further attracted by high net income for the first half of FY16 which came out to be $6.6 million. Compared to this, the first half of FY15 witnessed net income of $5.7 million. Similarly, the adjusted EBITDA for first half of FY16 was $20.1 million, much higher than adjusted EBITDA of first half of FY15 which amounted to $11.1 million.

In addition to this, the analysts viewed the first day as being extremely good for an initial public offering. They believe that it helps set favorable terrains for the future. Nonetheless, it is a complete package as it has real GAAP profits alongside operating cash flows. Thus, it has an attractive revenue growth attached to its shares and it is expected that the analysts would be on the bulls side, however, one must wait for future actions before reaching decisions regarding the matter.

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