Did Kayak Catch the Facebook Flu?
Kayak Software seems to have gotten trading cold feet after the post-IPO troubles of Facebook (NASDAQ:FB). The online travel service has reportedly postponed its roadshow scheduled to start last week as the company stops to take better stock of investor confidence. Morgan Stanley (NYSE:MS), the lead bank on Facebook’s initial share sale, had also been hired to lead Kayak’s IPO.
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Facebook went public earlier this month in what was the biggest technology IPO ever, but its shares have dropped 24 percent since its market debut until close of markets on Tuesday. Investors have been worried about Facebook’s revenue growth opportunities and questions have been raised about the underwriting banks’ management of the offering. A group of shareholders filed a lawsuit against the company and its underwriters, alleging its offering stock at $38 a share was overpriced. Facebook also posted a first-quarter profit this year decrease as sales growth slowed.
Kayak first filed to go public in November 2010, and its period of 18 months without pushing ahead with an offering is already four times longer than the average waiting period for companies. Kayak posted a profit of $4.15 million in the first quarter of the year, compared with a loss of $6.91 million in the year-earlier period. Revenue rose 39 percent to $73.3 million. However, it faces growing competition from other online travel services, including those provided by Google (NASDAQ:GOOG).
IT cloud-computing services company ServiceNow and Internet security provider Palo Alto Networks, which have both planned IPOs led by Morgan Stanley, are still on track to go public, according to Bloomberg.
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