Tags: HomeAway | Soars | IPO

HomeAway Surges After IPO Prices Vacation Site at Range Top

Wednesday, 29 Jun 2011 02:44 PM

HomeAway Inc., the vacation-rental website operator, surged on its first trading day after raising $216 million in an initial public offering, selling its shares at the top end of the marketed range.

The shares climbed $12.03, or 45 percent, to $39.03 as of 11:44 a.m. New York time on the Nasdaq Stock Market, trading under the symbol AWAY. The Austin, Texas-based company sold 8 million shares at $27 apiece in its IPO yesterday.

HomeAway sold about 10 percent of its common stock in its IPO, following LinkedIn Corp. in offering a smaller stake than most Internet companies. HomeAway’s gains underscore enthusiasm for wave of technology IPOs as well as the scant number of shares offered, said Pat Becker Jr., who manages $2.4 billion as a principal at Becker Capital Management in Portland, Oregon.

“They’ve done well because of the limited float,” Becker said in an interview today. “There’s just not supply to go around and you see some enormous moves in stock prices.”

The offering price values HomeAway at $2.2 billion. Morgan Stanley, Deutsche Bank AG, Goldman Sachs Group Inc. and JPMorgan Chase & Co. served as lead managers on the IPO.

Internet companies sold an average of 17 percent of their outstanding shares in U.S. IPOs this year, according to data compiled by Bloomberg. Zynga Inc., the biggest maker of games for Facebook Inc.’s social-networking website, may opt to list less than 10 percent of its shares in an IPO, a person familiar with the plans said this month.

More Customers

HomeAway expects more customers to visit the site following the IPO, Chief Executive Officer Brian Sharples said.

“Even though we have a great company, most consumers around the world have never heard of the business,” Sharples said in an interview today. “By taking the company public, presuming this is a successful IPO, it really puts the business on the map.”

HomeAway isn’t “one of these rocket ship Internet companies that has super-high growth and potentially an uncertain future,” he said. “HomeAway is really a very, very predictable business. We have been an above-average growth company but very stable in terms of our growth year to year.”

HomeAway got more than 90 percent of its $168 million in revenue from property listings last year, according to regulatory filings. The company, which counts Expedia Inc. and Priceline.com Inc. as competitors, had more than 560,000 listings in over 145 countries as of March 31.

HomeAway’s biggest shareholders include Austin Ventures, Redpoint Ventures, Technology Crossover Ventures, Institutional Venture Partners and Tiger Global Management. None sold shares in the IPO, according to filings. The company plans to use the proceeds to distribute unpaid dividends on convertible preferred stock.

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