Is the IPO drought over? Not quite. But OpenTable’s successful IPO today will give tech startups and VCs a sign of hope that you can still go public eventually if you have a real business. On a day when the Nasdaq is down 2 percent, OpenTable is up 40 45 percent from its offering price of $20 (which itself kept moving up from $12 to $14 initially). The stock opened at $24, and was trading at around $28 $29 last time I checked. With 21.6 million shares outstanding, that gives OpenTable a market capitalization of $605 $626 million on its first day of trading. (The company itself cleared $60 million in the offering). Update: The stock closed at $31.89, up 59 percent from the offering price, giving the company a market cap of $689 million at the end of the trading day.
This is an extremely healthy IPO. Opentable is not a blowout Internet company. But it is a solid Internet company that matters. It pulled in $55.8 million in revenues last year and a net loss of $1 million (largely due to expansion-related costs). In the first quarter of 2009, it managed to turn a net profit of $366,000 on revenues of $16 million. (For a deeper financial analysis, see this earlier post).
OpenTable delivers reservation management software to restaurants through a Web browser and collects monthly subscription revenues. In that sense it is in the same class of software companies as Salesforce—selling software as a service over the Web to business customers. But it also has a friendly (free) consumer-facing side. It is yet another example of enterprise and consumer apps merging in the cloud.
So what does it take for a tech company to IPO these days? If OpenTable is the new measuring stick, a company needs at least $50 million in revenues, have at least one quarter of profits, customers with proven loyalty, and solid growth potential. In other words, it needs to be a real business.
Congrats to the OpenTable team!
Congratulations to OpenTable, another site that is growing rapidly is http://www.twibeo.com the microblogging site that lets you share photos, videos and tect messages saying what you are doing.
http://www.twibeo.com
James, your useless spam-comments are annoying and make people hate your site. You should stop for your own sake.
James Stark is a douchebag.
i love james, he’s pmp’n and hey, pmp’ns ain’ts easy.
umakeitcool.com
dude
you belong in the oven
lance
wow. impressive.
Congrats to the Open Table guys! Great to see a real business model succeed these days. Great work.
…
So Ya, the business model 10 Years from now will be top 100 channels – omit the channel parts it will be top 100 sites. No more TV atleast not on the tube. As this generation focuses solely on the internet and moves away from Newspapers, TV, and uh real life…marketers only have one way to communicate out. That is the internet. Thats the business model.
Of course today the internet is still young but there will be no other option but internet in the future. No more flatscreen TVs, just flat screen laptops.
There will be a lot of OPEN nay-sayers…and they are wrong. This is a solid business that warrants this very strong public offering.
This is complete BS. A company that has a quarterly profit of $300K on a $16MM revenue should not be worth that much.
I have the feeling this is a play driven by the greedy investors who put money into the company years ago and now trying to push the price up so they could sell their holdings and report to the LPs great returns on that investments.
I would give it 2 weeks before it gets back to $16. Just like SolarWinds IPO last week and RosettaStone a month ago. Both are back to their IPO price.
i agree
agreed
I agreed.
when most companies are trading between 5-9 P/E., this companies is way overvalued @ it’s present share price.
The volume may be 21 million, but that could just be traders flipping the stock over, and over again.
I wouldn’t touch this stock with a ten foot pole, especially since the market is about to correct drastically.
is’nt the stock market the most corrupt gambling organization in existence?
GamblerLocator.com – place your bets
I’d like to gamble on your IQ. I’ll take the under. I’m guessing it’s less than 70.
idiotlocator.com — too stupid to know he’s stupid
Agree short it! remember CROX? $60 to $2
good point why is techcrunch even giving this time and space…i am getting really taken back by all the crap that techcrunch is posting….one day twitter
the next day google/gmail and now this crap
lance
Agreed.
Another sign that the greed on Wall Street never ends, and you can fool some of the people all of the time. Clearly there is cash on sidelines.
There are no more investors. Only speculators.
Wall Street is now officially the BIGGEST CASINO ON EARTH.
Open Table. Useful service. Not worth $100 million, let alone half a billion.
Key phrase: “if you have a real business.”
You nailed it, Erick. This recession is the periodic, necessary forest fire that clears out the underbrush. Those who offer a product with real value will survive the downturn and come out of it with guns blazing.
Congrats to Jeff Jordan and company!
Well done OpenTable.
Erik, can you encourage MG to perhaps write 20 posts/stories a week about OpenTable’s IPO success? It is inspiring for us wannabe (or inspiring to be) entrepreneur ? I reckon that OpenTable’s story deserves to be covered more frequently.
very impressive
Solid company, solid business, I am sure they will expand into new fields that need reservation systems. But I have to agree on the fact that a quarterly profit of $300K on a $16MM revenue does not make any sense. Almost every IPO started in the same trend. Lots of start-ups in this economy. A recent one I realized was http://www.hokiee.com they claim that they will revolutionize the online shopping behavior..
I don’t believe opentable is worth that much, but more power to them!
Wow, you guys actually wrote about a company other than Twitter and Facebook.
Congrats to the OpenTable team.
I think OpenTable has a solid business, but the valuation looks too aggressive. Solid, high growth SaaS companies can support a market cap/sales multiple of 3-5X, not 12. I would expect a correction once the euphoria dies down. It is good to see investors willing to buy into risk though …
Opentable hasn’t never been a start-up that mattered.
Over $150M in funding over ten years to make a minuscule profit for one quarter in an industry that is facing its worst downturn in decades?
By the end of the year, I’ll be able to buy OPEN stock with Flooz…
What a complete sham! There is no way on earth that this company is worth $600M Indian Rupies, let alone $600M USD.
i agree or even pesos
A company with annual rev of $64 M and possible income of $1.6 M is worth $600 M? That means the market cap is 10X rev and PE ratio of 375. I am not sure what the growth rate is. Is it 1000%? In my opinion, this is definitely a short opportunity.
Congrats to the OpenTable folks. There’s definitely a solid business there, and we’re never going to stop eating out.
SHORT! SHORT! SHORT! That’s the only thing I can think about $OPEN right now! SHORT IT!
I’m glad to see some IPO action, but this valuation is nuts. $600m market cap with $48m in 2008 revenue. They had a $1m loss last year.
A $366k profit this last quarter? What does that come to assuming 4 quarters of this profit, a 409 P/E? 12.5 times last year’s revenue!?
Sure they’re growing revenue 40% for two years, but who’s to say they won’t see that slow down drastically?
Let’s even assume they get to $100m in revenue in 3 years (40% growth). And even at that rate if they can generate a net of $10m (which seems unlikely), that’s still a 60 p/e 3 years from now!
I think it’s a great business since its developing a total monopoly. But I think people are just giddy about recent IPOs being successful.
this is fun to watch. i thought people were’nt eating out since the recession.
DineLocator.com – short orders
Quite amazing since half the places are empty anyways! I have thought for months at http://www.worstpizza.com to incorporate a reservation system onto the redesign.
Great to see a local tech company escape into the wild. Congrats on nabbing a cool ticker — “OPEN” — the best one since Saleforce.com grabbed “CRM”.
OpenTable is an awesome service! I stumpled upon a startup who had a sticker on a merchant window in San Jose who might be competition to OT. Not sure because they haven’t fully launched yet…www.spreezio.com. They look interesting though!
I’m surprise to see their shares reach that high. I mean I love the service, but never thought their IPO would shoot up like that.
Just what are their expenses? The CEO’s salary? A few servers and programmers and a few sales execs and they burn through 16 million?
I do like OpenTable and have used them to make many a reservation.
There expense is that they have to put a touchscreen computer at the host stand of every restaurant. Its not a cloud solution. The SQL database for the resos is running in the restaurant. Its old school.
Congrats..graph is going up in recession time.
Congratulations to the open table team and investors. I hope this money allow them to roll out new features. I’m here to help if needed.
Congrats to OpenTable. Frankly, I’m shocked at the high valuation given to them, but more power to them for pulling it off!
Please tell me this is a very late april fools joke! lol
Opentable is awesome… but giving them a 600 million valuation is saying that they are almost head to head with twitter who which was offered 700 million
they declined it.. but clearly someone did their math really good before offering
Congratulations to OpenTable.
Still strange in times when people go out eating less due to recession.