Priceline Tops $1,000 on Growing Demand for Web Bookings
Priceline.com Inc. (PCLN) closed above $1,000 a share yesterday, exceeding a dot-com bubble high and making the largest U.S. online travel site the ninth member of a club of U.S. companies trading in quadruple digits.
The Norwalk, Connecticut-based company rose 0.6 percent to a record close of $1,000.62 in New York. The bubble-era high on a split-adjusted basis was $990 in April 1999, and the stock breached $1,000 in intraday trading on Sept. 18. The company’s shares have advanced 61 percent this year, compared with a 21 percent gain for the Standard & Poor’s 500 index.
In reaching the milestone, Priceline is the only technology stock to join companies such as Berkshire Hathaway Inc. (BRK/B), Seaboard Corp., Farmers & Merchants Bank of Long Beach and five others trading at more than $1,000 a share, according to data compiled by Bloomberg, which tracks more than 3,000 publicly-traded U.S. institutions with prices above $1. Google Inc. (GOOG) has also been flirting with that threshold.
Priceline’s gains have been fueled by its surging international business through two units, Amsterdam-based Booking.com and Bangkok-based Agoda.com., said Henry Harteveldt, a travel analyst at Hudson Crossing in San Francisco.
Priceline reported second-quarter sales last month that topped analyst estimates on international growth. International bookings jumped 44 percent year-over-year in the second quarter, accounting for 85 percent of total bookings for the company.
“That’s the key to Priceline’s success,” Harteveldt said. “The business that’s known for naming your price has, through organic growth and acquisitions, really transformed itself.”
Priceline’s business has surged as its top rival has faltered. Expedia Inc. (EXPE) reported second-quarter profit and revenue in July that missed analysts’ estimates. The Bellevue, Washington-based company cited weakness in Southern Europe and reduced traffic from TripAdvisor Inc. (TRIP)’s site.
During the late 1990s dot-com bubble, Priceline was known for its name-your-own-price option for airlines, hotels and other services and advertisements featuring pitchman William Shatner. Between April 1999 and October 2000, a period when many dot-com companies failed, Priceline lost 97 percent of its market value.
Priceline purchased Booking.com in 2005 and Agoda.com in 2007, helping to reshape the company into a leader in international travel.
To diversify its business, Priceline also acquired travel search-engine Kayak Software Corp. for $1.8 billion in a deal that closed in May. Kayak lets travelers compare prices and make reservations for hotels, flights, cars and vacations.
Shatner still promotes the Priceline brand -- and keeps an eye on the stock. Last month, after the company’s earnings briefly pushed the shares to as high as $994.98, the actor who played Captain Kirk on the “Star Trek” TV series said in a Twitter Inc. post, “Congratulations to @Priceline on their stock price. Wish I hadn’t sold my stock all those years ago.”
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