YuMe Said to Be Pricing IPO Below Expected $12 to $14 Range

YuMe Inc. (YUME), a provider of online-video advertisements, is pricing its initial public offering below the expected range, said a person with knowledge of the deal.

The IPO, set for later today, will come in lower than the $12 to $14 a share the company projected in its prospectus, said the person, who asked not to be named because the terms haven’t been disclosed. Scott Lahde, a YuMe spokesman, declined to comment.

Tremor Video Inc. (TRMR), a YuMe competitor, has slid 20 percent since its IPO in June, a sign of weakening investor demand. At the bottom of the range, Redwood City, California-based YuMe would be valued at $380 million, less than Tremor’s market capitalization of $397.4 million. Both companies compete with Google Inc. (GOOG) and a host of startups in the video-ad market.

Based on sales in the 12 months that ended in March, at $12 a share YuMe would be valued at 3.1 times revenue, compared with a price-to-sales ratio of 3.5 for Tremor and 5.2 for Google. YuMe’s first-quarter revenue rose 33 percent to $26.6 million from $20.1 million a year earlier, and the company’s net loss widened to $3.34 million from $1.49 million.

Like many technology companies when they go public, YuMe warned in its prospectus that it “may not be profitable in the future.”

To contact the reporter on this story: Serena Saitto in New York at ssaitto@bloomberg.net

To contact the editor responsible for this story: Pui-Wing Tam at ptam13@bloomberg.net

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