ValueClick (Nasdaq: VCLK) shares closed up 1 15/16 to 20 15/16 Friday after the company priced shares at $19, the middle of their range. The IPO could be bogged down by the privacy issues that have been troubling DoubleClick (Nasdaq: DCLK).
The company increased its price to $18 to $20, up from $11 to $13, as it picked up steam ahead of its debut.
"The company has nice support," said Kenan Pollack of IPO Central; "DoubleClick has done well, as have Avenue A (Nasdaq: AVEA) and 24/7 Media (Nasdaq: TFSM)." Though it's far from a first mover in the online advertising space, "a mediocre company in a strong category has a better chance than a good company in a mediocre category," Pollack said. DoubleClick's 30 percent ownership stake should also help the company, he said.
Randall Roth, who covers the company for Renaissance Capital, had the opposite take on the DoubleClick connection. "People are stewing over privacy concerns," and ValueClick isn't permission-based. He said the connection with DoubleClick could hinder the offering. The fact that the company is losing money is not a good thing either, Roth added, especially with so much competition in the field.
The company reported a net loss of $3.1 million on revenue of $21.1 million for the year ended December 31.
Like DoubleClick, the company uses "cookies," on an Internet user's hard drive, generally without the user's knowledge or consent to track user information for marketing purposes.
DoubleClick has been involved in class action lawsuits alleging, among other things, that it unlawfully obtains and sells Internet users' personal information. It is also the subject of a Federal Trade Commission inquiry concerning its collection and maintenance of information about Internet users. The company has revived because Wall Street analysts have said that any weakness in the stock was a buying opportunity.
ValueClick's competitors include companies that do performance-based advertising, such as cost-per-click, or CPC; cost-per-lead, or CPL and cost-per-action, or CPA. In the CPC market segment, other players include Flycast, which is owned by CMGI (Nasdaq: CMGI), Advertising.com, eAds, Datacomm, and ClickAgents. It also competes with DoubleClick, 24/7 Media, Flycast DirectLeads and CommissionJunction.