Services & Software

Facebook's collateral damage: Kayak's IPO

The online travel company is reportedly reconsidering when it wants to go public after watching Facebook's poor performance.

Although Facebook's initial public offering hurt investors and the social network's share price, there appears to be another victim of its troubles.

The Wall Street Journal is reporting today, citing sources, that online travel site Kayak decided against holding its "roadshow" with would-be investors around Memorial Day as planned, due to issues with Facebook's IPO. The Journal's sources say that Kayak is trying to determine the willingness in the investment world to drop cash into another Internet IPO.

If investors are concerned, it wouldn't be such a bad idea. Over the last year, five major online companies have gone public -- Facebook, Zynga, Groupon, Pandora, and LinkedIn. Over that period, just one of them -- LinkedIn -- has watched its shares rise over its IPO price. The others have watched their shares fall as much as 40 percent in some cases, according to data from Kleiner Perkins Caufield & Byers.

Facebook, of course, has been the most concerning for investors. The company went off at $38 a share earlier this month, only to watch its stock plummet to a close yesterday of $28.19. Morgan Stanley, the lead underwriter on the Facebook deal, also happens to be the lead underwriter on Kayak's expected IPO.

For its IPO, according to the Journal's sources, Kayak doesn't want to create another Facebook scenario, so it will price its IPO "conservatively." The company has not yet announced a price.

If Kayak ends up going public in the near future, the company will be listed on the Nasdaq. Last year, Kayak generated $224.5 million in revenue, up from the $170.7 million in 2010. The company was able to muster a profit of $9.7 million in 2011.