Trulia Soars in Trading After IPO Prices Above Range
Trulia Inc. (TRLA), the operator of a residential-property listings website, climbed 41 percent in its trading debut after pricing the shares above the proposed range in an initial public offering.
The shares rose to $24 at the close in New York. The San Francisco-based company yesterday raised $102 million for itself and existing shareholders, selling 6 million shares for $17 each, Trulia said in a statement yesterday.
The IPO attracted higher-than expected demand after residential property values rose 0.5 percent in June from a year earlier, the first year-over-year gain since September 2010, according to the S&P/Case-Shiller index of home prices in 20 U.S. cities. Sales of existing houses last month jumped to the highest in more than two years, rising 7.8 percent from August 2011, the National Association of Realtors said yesterday.
“We help consumers find the right place to live and connect with real estate professionals,” Pete Flint, Trulia’s chief executive officer, said in an interview on Bloomberg Television’s “Market Makers,” after the start of trading. “We help consumers solve really big problems.”
The shares of Trulia’s larger competitor Zillow Inc. (Z) have more than doubled since a July 2011 IPO. Both companies have been using applications on smartphones and tablets to amass more users. Trulia is generating revenue by selling subscriptions to mobile access, and the website and mobile applications are used by more than 20 million visitors a month, the company said.
Trulia originally offered its shares, representing a 23 percent stake, for $14 to $16, according to a regulatory filing. At the IPO price, Trulia is valued at about $448 million, or 8.8 times sales of $51 million in the 12 months through June.
The company has been “built up” over the past eight years, Flint said. The IPO price wasn’t based on the experience of Facebook Inc., whose shares plunged following its initial stock sale, he said in today’s interview.
Trulia is listed on the New York Stock Exchange under the symbol TRLA. The company will use IPO proceeds for working capital, according to the filing. The company had $9.46 million in cash and equivalents as of June 30.
In a separate debut today, Spirit Realty Capital Inc. (SRC) closed at $15, unchanged from its IPO price, after raising $435 million yesterday with 29 million shares sold. The Scottsdale, Arizona-based owner of single-tenant properties was taken private by investors led by Macquarie Group Ltd. in 2007. Its New York Stock Exchange symbol is SRC.
Pending real estate IPOs include Domus Holdings Corp., the parent company of services firm Realogy Corp., which was taken private by Apollo Global Management LLC (APO) in 2007, and landlord Archstone Inc., the 11th largest U.S. apartment owner. Englewood, Colorado-based Archstone is controlled by Lehman Brothers Holdings Inc.
JPMorgan Chase & Co. and Deutsche Bank AG led the Trulia IPO. Morgan Stanley led the Spirit Realty offering.