- Rubicon Project is said to be one of the first big ad tech IPOs of 2014
- Rubicon Project IPO, like Criteo, is a gauge of whether Wall Street is as excited about the ad tech part of the biz as it is about platforms
- The IPO pricing was at the lower end of a range that was at USD 15-19 per share
- The shares were able to up the pricing by over 30 per cent and traded at USD 20.04 at the close of day one
Another ad tech IPO was put to test on Wall Street when The Rubicon Project rang the opening bell of the New York Stock Exchange (NYSE) on April 2, 2014. Claimed to be one of the first big ad tech IPOs (initial public offering) of 2014, Rubicon Project, like Criteo or Rocket Fuel, is a gauge of whether Wall Street is as excited about the advertising technology part of the business as it is about media platforms such as Twitter.
Trading as ‘RUBI’, Rubicon Project announced the pricing of its IPO of 6,770,995 shares of common stock at a price to the public of USD 15 per share. However, this was able upped by over 30 per cent and the shares traded at USD 20.04 at the close of day one.
The IPO pricing was at the lower end of a range that was at USD 15-19 per share. One would argue that this was a concern, as what could have brought the company nearly USD 100 million will now net it just over USD 81 million in cash, with another USD 20 million going to shareholders.
While Rubicon is a fast-growing company and claims to be EBITDA positive for the last two years, it is still seen as a loss making venture at present. Rubicon states that it has taken the cash inflow of the last two years and invested in new markets and products. The expectations hence from the company are on the higher side.
The keyword that will work in Rubicon Project’s favour is ‘automation’, an area of interest for many companies in the advertising business. Various players have taken initiatives to steer their future growth in this direction. Rubicon Project is to advertising automation what Intel is to the PC/ laptop industry. This enables it to work with some of the big names of the domain that are focussed on automating advertising.
The response to the Rubicon Project IPO on day one is also indicative of the larger financial community recognising the importance of automation in the USD 100 billion advertising industry.
Rubicon Project will not receive any proceeds from the sale of shares by the selling stockholders. It is understood that none of the Rubicon Project owners or initial investors looked to liquidate their stake in the IPO.
Rubicon Project has also granted the underwriters a 30-day option to purchase up to an additional 1,015,649 shares of common stock to cover over-allotments, if any. The closing of the offering is expected to be on April 7, 2014, subject to the satisfaction of customary closing conditions.
Morgan Stanley & Co. LLC, Goldman, Sachs & Co. and RBC Capital Markets, LLC are acting as joint book-running managers for the offering. Needham & Company, LLC, Oppenheimer & Co. Inc., and LUMA Securities LLC are acting as co-managers for the offering.
The offer is being made only by means of a prospectus.