YuMe Inc (NYSE:YUME)’s IPO pricing announced
A frontrunner in the provisioning of digital -video brand advertising solutions, YuMe Inc (NYSE:YUME) announced the pricing of its IPO of 5,125,000 common stock shares at a price of $9.00/share. The shares commenced trading on the NYSE on 7 August 2013 under the YUME symbol. The company is selling all the shares in the offering.
The underwriters have been given a 30-day option to buy an additional 768,750 common stock shares from the selling-stockholders at the IPO price. Deutsche Bank Securities, Barclays and Citigroup are acting as the joint book-running managers of this offering. Piper Jaffray and Needham & Company will be the co-managers.
YUME’s shares traded much lower on Wednesday, after they sold for sharply-less than what is expected in its IPO. This weak showing is an indication that investors are still shaky about the emerging-class of tech providers. They definitely see an opportunity to catapult the ad-industry into the age of the internet but have been facing stiff competition.
The company’s shares dipped by 0.8% at $8.93 in the early afternoon trading on Wednesday. Around one hour into yesterday’s trading session, the shares gave-up morning gains of almost 10%. Since then, they have been swinging between some gains and losses.
The IPO details
On Wednesday, the company sold 5.1M shares at $9/share in its IPO which was below the mid-point range of $12-$14 that had been expected by the company. As per dialogic, this is the 2nd largest discount of its kind for any United States’ Initial Public Offering this year excluding a developmental-stage drug company, Omethera Pharmaceuticals that went public in April but did not generate any revenue.
An IPO price that is well-below its expected range is common for a smaller drug company, than for any other fast-growing tech firm. This is because investors evaluate the prospects of its developmental-stage products.