YuMe Inc (NYSE:YUME)’s IPO pricing announced

Posted by Lynn Eisler August 8, 2013 0 Comment 718 views

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.

Investors unsure

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.

About Lynn Eisler

Lynn Eisler is a national news reporter focusing on economic issues, data analysis and the financial health of state and local governments. Lynn has been honored with the H.L. Mencken Award for Investigative Reporting, the Champion of Justice Award for reporting on the drug war, and the John Hancock Award for business reporting. Lynn was also a Knight Medical School Fellow at the University of Michigan.

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