Startups in Silicon Valley may be in an early-stage financing bubble, and the US IPO market might be catching a whiff.
This morning, media content farm Demand Media (NYSE:DMD) rocketed 35% at its IPO. The insane demand for this Web 2.0-ish company is much like a US IPO in 1999 or a Chinese IPO for white hot Chinese video site Youku (NYSE:YOKU) and Chinese retailer DangDang (NYSE:DANG).
Investors are lusting for DMD because the site has been eating into the prized web traffic markets of Google (NASDAQ:GOOG), AOL (NYSE:AOL), Yahoo! (NASDAQ:YHOO), and even Facebook. It remains to be seen whether Demand Media has a large enough barrier to entry to ward off margin-eating competition.
Another media company, one that measures all our media consumption behaviors, also had a strong showing. Nielsen Holdings (NYSE:NLSN) joins upcoming rival comScore (NASDAQ:SCOR) as a publicly traded company. Shares of NLSN are up 10% on day one. Looks like General Motors (NYSE:GM) won’t hold the attention for best recent IPO.
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