IPO of Ticketmaster Online-CitySearch Among 5 Best Ever
Ticketmaster Online-CitySearch Inc., an online seller of tickets and provider of city guides, produced a blockbuster first-time stock deal Thursday as its shares nearly tripled in price.
Powered by the investor craze for new Internet stocks, shares of the Pasadena company's initial public offering, or IPO, rose as high as $60 a share. They closed at $40.25 a share on Nasdaq, up from an initial price of $14.
Investor demand for Internet company stocks made Ticketmaster Online-CitySearch one of the top five IPOs ever in terms of first-day price increase, according to CommScan, the New York research firm.
Because of the strong demand, the IPO sale raised $98 million for the company, rather than the $63 million originally expected. Based on the 69.5 million shares outstanding and Thursday's closing stock price, the company has a market capitalization of about $2.8 billion.
"This deal had everything going for it, including perfect timing and top management," said Tom Taulli, a technology analyst with IPO Monitor, a Calabasas-based data firm.
The mood in CitySearch's airy Pasadena headquarters was "like a party," said one of a few dozen grinning employees--most of them in their 20s and 30s. Many workers, some in jeans and sweatshirts, were closely watching stock price moves and a few were teasing each other about the tens of thousands of dollars they had made in just a few hours.
Others said it was business as usual.
"We're excited, but maintaining focus," said Scott Johnson, an Internet business advisor for the firm, which has 560 employees.
In August, Barry Diller's USA Networks Inc. merged the online ticketing arm of its Ticketmaster Group with CitySearch in an effort to expand its Internet business.
USA Networks, which owns the Home Shopping Network cable TV channel, plans to eventually cross-promote the local content of CitySearch with the television empire Diller is building.
Diller, who is credited with building the Fox network for News Corp.'s Rupert Murdoch in the early 1990s, was a key factor in the success of the IPO, analysts agreed.
"People forget Barry Diller made the Home Shopping Network," said David Menlow, head of IPO Financial Network Corp. in New Jersey. "His propensity for innovation is something the market is waiting for and betting on."
