Looking to jump-start it flagging share price, Priceline.com (Nasdaq: PCLN) trumpeted its sales growth Tuesday, announcing new highs in airline ticket sales, mortgage closings and automotive sales.
Why all the updates? Concerns about Microsoft competition, the approaching expiration of its lock up period, an Internet slump and some bad press have all thumped Priceline shares (chart).
Shares closed Monday at 55 5/8, well below their high of 165. Priceline's slide has been partly warranted as a correction, but the dramatic downswing since Microsoft's Expedia travel website unveiled a "Price Matcher" service for hotel rooms has put the stock far below most analysts' targets. Like Priceline's patented program, Expedia's new service lets people name their own prices through bidding.
And the stock isn't expected to soar with Priceline's lock up period expiring Sept. 25. When lock-up periods expire insiders are free to sell shares, possibly flooding the market.
Despite all the negatives recently, Priceline's progress is impressive. The company said it now accounts for over 2 percent of all the leisure airline ticket sales in the United States. A record 50,000 leisure airline tickets were sold last week, and a single-day high of 10,000 ticket sales was notched.
Average weekly ticket sales were just 5,000 to 7,000 at the beginning of the year, the company said. And for good measure, Priceline said Monday its name-your-price hotel room service set weekly sales records of 15,000 rooms and 16,000 rooms. September hotel room bookings for the service are up more than 300 percent so far this year.
Priceline's Home Finance group which offers home mortgages also set a record, closing $23 million worth of loans in the past 30 days. Priceline recently announced a joint venture with Alliance Capital Partners to offer name-your-price mortgages.
New car sales by priceline.com's Automotive Services group rose by more than 100 percent in the past 30 days. The company just expanded its name-your-price service to southern California, New Jersey, Connecticut, Florida, and eastern Pennsylvania.
Some analysts said Priceline is underappreciated.
"We attribute this lag to an ongoing lack of appreciation for the company's unique demand collection system," said Keith Benjamin, an analyst with BancBoston Robertson Stephens in a recent research note. "We remain highly impressed by the brand's power and momentum. We anticipate dramatic upside potential."