Millennial Media (News - Alert), a mobile advertising company, which recently debuted on the stock market last Thursday, saw an large rise in its stock price. These shares were hot commodities and went way up at more than double its initial price.
This follows the earlier LinkedIn (News - Alert) IPO where shares closed at 109 percent up on the first day of trading. The stock symbol for Millennial Media is MM and is now trading on the New York Stock Exchange. They are one of four companies going public this past Thursday and 10 overall this week.
The state of the IPO market has not been very encouraging in the past couple of years, especially with technology companies. Many preferred to stay privately owned rather than go through all the requirements of filing an IPO. However with high profile debuts like LinkedIn, the soon to be Facebook (News - Alert), and now Millennial Media, it's clear that investors are eager to get into the tech sector again.
The fast growing demand for smartphones and tablets is clearly one of the factors behind the popularity of mobile ads such as the ones provided by Millennial Media. As the market itself grows, so does the company's potential market. It's a very positive situation which hasn't escaped the stock investors who flocked to buy these early stocks.
The Baltimore company raised $132.6 million in initial capital with the offering of 10.2 million shares on Wednesday night. Shares ended up priced at $13 each, up from an earlier estimate of $9 to $11. The money gathered by this initial offering will be used by Millennial to pay for general corporate purposes like expanding around the globe, and develop new products. Its revenue so far is $103.7 million over the past year, although it's not making a profit quite yet, losing $5.3 million so far this year. By the end of the open market day on Thursday, the shares finished at $25.20 each.
It's hard to predict growth in such a fast changing market, but the mobile ads sector is said to be one of the most interesting field currently. There are billions of people around the globe who are going to use a phone as their first computing device, and tailoring content for them will be a very profitable business proposition. Millennial Media is one of many companies hoping to cash in with this fast growing market.
Edited by Amanda Ciccatelli