US travel site TripAdvisor hits market with thud
Shares of popular travel ratings website TripAdvisor sank about five percent on their first day trading publicly Wednesday, as US investors remained skittish about new tech listings.
Spun off by parent Expedia, TripAdvisor shares dropped from their last other-the-counter price of $30.25 Tuesday to as low as $28.00 before rebounding to $28.70 in thin afternoon trade.
Expedia hived off the 11-year-old company and issued 123 million new shares to existing shareholders, giving TripAdvisor a market valuation of about $3.5 billion.
Operating websites in 29 countries, TripAdvisor makes money off of the travel advertising it packages with listings and mostly user-generated reviews of hotels, flights, vacation packages and other services.
The company says its sites pull in 44 million unique views a month, enhanced by links to users' accounts on social media websites like Facebook.
It also syndicates its content to 30,000 partner sites, such as hotels.
The company pulled in $486 million in revenues in 2010, 37 percent higher than the previous year, for net earnings of $139 million.
"We're doing all this with a great margin... we are extremely profitable," said president and chief executive Stephen Kaufer.
Kaufer said the listing will help the company build its business around the world, with a special eye on China, where it launched its own travel website and also bought a competing one.
"It's a very different market; we continue to invest heavily" in China, he said.
"There's a billion people. They're starting to travel domestically and internationally, and we intend to help those folks."
Parent company Expedia's shares were up 2.9 percent during the day.
(c) 2011 AFP