IBJNews

Angie’s List stock surges after shares hit market

Back to TopCommentsE-mailPrintBookmark and Share

Angie’s List Inc., the consumer-review website with more than 1 million paying members, surged as much as 44 percent in its trading debut Thursday after raising $114 million Wednesday in its initial public offering.

Angie’s List, trading on the NASDAQ stock market under the symbol ANGI, closed the trading day up more than 25 percent, at $16.26 per share, after rising as high as $18.75 early in the morning.

The Indianapolis-based company sold 8.8 million shares for $13 apiece, according to a filing, after offering them for $11 to $13, the top of the proposed range.

The company, which provides reviews of plumbers, electricians and other service providers, follows the success of Internet peer Groupon Inc.’s IPO this month. The Chicago-based online-coupon leader raised $700 million Nov. 3, 30 percent more than it sought, after pricing the shares above the marketed range. The stock surged 31 percent in its trading debut and had gained 20 percent since the IPO as of yesterday.

“The market for entering IPOs appears to be cracking back open,” said Colin Sebastian, an analyst at Robert W. Baird & Co. in San Francisco. “This is a good first day for a smaller-scale IPO, and that could give other companies confidence.”

The IPO price valued Angie’s List at $723 million, or about 9.2 times sales in the 12 months through September. That’s about a 67-percent premium to Google Inc., which trades at about 5.5 times trailing 12-month sales and is named as a competitor in the Angie’s List filing. Groupon, also named as competition, trades at about 12 times sales in the same period.

Groupon sold 35 million shares at $20 each. Its stock soared 31 percent, to $26.11, on its first day of trading on Nov. 4. The gains reflected rising optimism concerning IPOs after market volatility earlier this year persuaded many startups to delay initial share sales, resulting in the biggest IPO backlog since 2000.

Delphi Automotive Plc, the former auto-parts unit of General Motors Co., also completed an IPO Wednesday, raising $530 million after pricing at the lower end of its proposed range.

Angie's List unprofitable history did not scare away initial investors. The company hasn't turned an annual profit since its inception 16 years ago.

Revenue at Angie’s List increased 46 percent, to $62.6 million, in the nine months ended Sept. 30 compared with the year-earlier period, the IPO filing shows. Its net loss widened to $43.2 million from about $19 million.

The financial data on Angie's List "is not good at all, but their brand name's awareness is key," in their debut's success, Scott Sweet, managing director of research site IPOBoutique.com, told the Wall Street Journal. "This is not one in which you park money that you can't afford to lose. We're not talking about impressive numbers."

The company planned to sell about 6.3 million shares in the offering, with the remaining 2.5 million sold by existing shareholders, according to the prospectus. Battery Ventures had planned to reduce its stake to 15 percent from 18 percent, while BV Capital was paring its stake to 9.3 percent from 12 percent.

The company was started in 1995 by Angie Hicks, who was the company’s president until 1998, when she took a leave of absence to get an MBA from Harvard University. Hicks, now chief marketing officer, intended to trim her stake to 1.5 percent from 1.8 percent, the filing shows.

Angie’s List establishes new markets by offering free memberships, according to its prospectus, and begins charging fees usually within 24 months. The company had 175 paid markets as of Sept. 30, compared with 45 in January 2008.

In New York City, Angie’s List memberships cost from $3.25 to $5.20 monthly or $29 to $46.40 a year, according to the website. The company has also offered promotional discounts in partnership with Groupon. Cheryl Reed, a spokeswoman for Angie’s List, didn’t immediately return phone calls seeking information about the company’s pricing plans.

Angie’s List plans to use net proceeds from the offering to fund advertising and increase membership, the filing shows. Bank of America Corp. led the offering.
 

ADVERTISEMENT

  • Still Surging?
    Now under $12. Looks like the insiders cashed in, though. Can't wait to see who the institutional owners are.
  • Angie Makes $4 Million, Company Lost $100 Million
    Video: Pete the Planner on Angie's List IPO

    http://www.youtube.com/watch?v=c1CyO9NHf0w
  • Why did insiders need to cash out scratch that I mean bailout on day 1
    Yeah the State pension fund purchased 2 million shares
  • Nope
    Ryan sounds like one of their lawyers. Ha ha. Not buying. Biz model is obsolete.
  • Headline
    The headline should be "Angie's List Surges Before It Hits The Market, Then Flounders."
  • Uhhh, Ryan
    I don't think Facebook and Twitter are publicly traded.
  • S/1 link
    http://www.sec.gov/Archives/edgar/data/1490281/000104746911008854/a2205238zs-1a.htm
  • Groupon
    Here is a link to Groupon's S1. Please help me understand where you see their profit. I see a loss of $300M in the first 9 months of this year.
    • Yeah right
      Early stage? You're kidding? 16 yrs old?

      They may raise $ today but this is a loser stock and biz model. Groupon makes $ btw.
      • I don't think you get it
        So let me get this straight. An Indiana company with a quickly growing user base goes public and all anyone has to say is something negative? Nevermind that smart investors who attended road show presentations priced this deal at the high end of its range, and then it popped 25% on top of that. How about we celebrate a Hoosier success? What clearly nobody seems to understand is that this business is all about scale. This company loses money because it chooses to, not because it can't turn a profit. This is all about building the largest user base possible before aiming for profitability. By the logic employed on most IBJ Angie's List articles I've recently read, nobody would have wanted to be an early stage investor in Facebook, Twitter, or any other major new company aiming for scale either.
      • Political Payment
        Who bought this IPO?

        Are Indiana's public funds involved?

        • IPO for Dummies
          Calculating a Angies List price/earnings ratio is impossible considering they have never had any earnings........

          Tell me how this company can have a market capitalization larger than Interactive Intelligence that does shows profits????
        • "Surges"
          If by "surges" you mean "drops 15% once insiders sell their $13 shares to shmucks for $18", then yes, that is a correct use of the word. Just wait until the options open on this thing and folks can start shorting it.

        Post a comment to this story

        COMMENTS POLICY
        We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
         
        You are legally responsible for what you post and your anonymity is not guaranteed.
         
        Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
         
        No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
         
        We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
         

        Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

        Sponsored by
        ADVERTISEMENT

        facebook - twitter on Facebook & Twitter

        Follow on TwitterFollow IBJ on Facebook:
        Follow on TwitterFollow IBJ's Tweets on these topics:
         
        Subscribe to IBJ
        1. Hiking blocks to an office after fighting traffic is not logical. Having office buildings around the loop, 465 and in cities in surrounding counties is logical. In other words, counties around Indianapolis need office buildings like Keystone, Meridian, Michigan Road/College Park and then no need to go downtown. Financial, legal, professional businesses don't need the downtown when Carmel, Fishers, North Indy are building their own central office buildings close to the professionals. The more Hamilton, Boone county attract professionals, the less downtown is relevant. Highrises have no meaning if they don't have adequate parking for professionals and clients. Great for show, but not exactly downtown Chicago, no lakefront, no river to speak of, and no view from highrises of lake Michigan and the magnificent mile. Indianapolis has no view.

        2. "The car count, THE SERIES, THE RACING, THE RATINGS, THE ATTENDANCE< AND THE MANAGEMENT, EVERY season is sub-par." ______________ You're welcome!

        3. that it actually looked a lot like Sato v Franchitti @Houston. And judging from Dario's marble mouthed presentation providing "color", I'd say that he still suffers from his Dallara inflicted head injury._______Considering that the Formula E cars weren't going that quickly at that exact moment, that was impressive air time. But I guess we shouldn't be surprised, as Dallara is the only car builder that needs an FAA certification for their cars. But flying Dallaras aren't new. Just ask Dan Wheldon.

        4. Does anyone know how and where I can get involved and included?

        5. While the data supporting the success of educating our preschoolers is significant, the method of reaching this age group should be multi-faceted. Getting business involved in support of early childhood education is needed. But the ways for businesses to be involved are not just giving money to programs and services. Corporations and businesses educating their own workforce in the importance of sending a child to kindergarten prepared to learn is an alternative way that needs to be addressed. Helping parents prepare their children for school and be involved is a proven method for success. However, many parents are not sure how to help their children. The public is often led to think that preschool education happens only in schools, daycare, or learning centers but parents and other family members along with pediatricians, librarians, museums, etc. are valuable resources in educating our youngsters. When parents are informed through work lunch hour workshops in educating a young child, website exposure to exceptional teaching ideas that illustrate how to encourage learning for fun, media input, and directed community focus on early childhood that is when a difference will be seen. As a society we all need to look outside the normal paths of educating and reaching preschoolers. It is when methods of involving the most important adult in a child's life - a parent, that real success in educating our future workers will occur. The website www.ifnotyouwho.org is free and illustrates activities that are research-based, easy to follow and fun! Businesses should be encouraging their workers to tackle this issue and this website makes it easy for parents to be involved. The focus of preschool education should be to inspire all the adults in a preschooler's life to be aware of what they can do to prepare a child for their future life. Fortunately we now know best practices to prepare a child for a successful start to school. Is the business community ready to be involved in educating preschoolers when it becomes more than a donation but a challenge to their own workers?

        ADVERTISEMENT