Appetite for OpenTable offering appears strong
This is just what online restaurant-reservations firm OpenTable Inc. wants to see: More hungry customers than it has seats to offer.
Apparently strong investor interest in the firm’s initial public stock offering spurred its underwriters Tuesday to raise the price range for the deal to $16 to $18 a share, from $12 to $14. The offering is expected to be priced sometime this week.
The San Francisco company’s IPO is being closely watched in Silicon Valley because it would be the smallest new stock offering to come to market this year. If it flies, it could open the door for other relatively young but promising companies to tap the equity market.
OpenTable, founded in 1998, lost $1 million last year on sales of $55 million, which had doubled from 2006.
The public is being offered 3 million shares -- about half by the company, the other half by insiders cashing out.
The stock is expected to trade on Nasdaq under the symbol OPEN. Merrill Lynch & Co. is the lead underwriter.
There have been just five IPOs in the U.S. market this year. The last one was by satellite imaging firm DigitalGlobe Inc. last week.
As DigitalGlobe demonstrated, just because a deal gets a strong early start doesn’t mean it has legs.
DigitalGlobe’s underwriters priced its shares at $19, above the expected range of $16 to $18. The stock rose as high as $25 on the first day of trading, but has since tumbled below the offering price. It closed Tuesday at $18.25, down $1.26 from Monday’s close.
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