The New York-based company rose $6.25 to $20.25. About 5.1 million shares changed hands on the Nasdaq market.
24/7 Media sold 3.25 million shares in an initial public offering that raised $45.5 million. The shares sold at $14 each, the top of the $12-to-$14 expected range set by lead underwriter Merrill Lynch & Co.
“You caught me there,” said John Fitzgibbon, editor at the IPO Reporter, who had been wary of 24/7’s IPO but who now believes that those predicting the demise of the IPO market were talking prematurely.
“I am in awe and flabbergasted,” Fitzgibbon told Reuters.
Ryan Jacob, an analyst at Standard & Poor’s, told Reuters, “24/7 Media will do very well. . . even though it is substantially smaller than DoubleClick. . . they will be very viable long-term.”
“Everyone sees Internet advertising as a huge and fast- growing market,” George Garrick, chief executive of San Francisco-based Flycast Communications Corp., which competes with 24/7 Media, told Bloomberg. “There are really no dominant players in terms of market share.”
Internet advertisers probably will consolidate rapidly within the next two years, so that the Internet advertising model more closely resembles that of television, in which a handful of networks funnel most advertisements, Garrick said.
“People are looking at the Internet as being such a fundamental emergence of a new technology and a way of doing things that (they) are willing to place very long-term and strategic bets on companies that they believe are going to be major players, and are doing so without any regard at all to their (current) financial performance,” Garrick was quoted as saying..
The company had pro forma revenue of $5.4 million and a loss of $16.9 million in 1997.
The initial stock sale gave 24/7 Media a market capitalization of about $211.3 million and several of its senior officers and directors stakes valued at more than $10 million. At Friday’s close, the company had a market capitalization of $305.6 million and the stakes of some of its officers and directors had risen to more than $20 million.
The company trades under the symbol “TFSM.”
The New York City-based company operates the 24/7 Network, a network of more than 85 Web sites; CLIQNOW!, a network of over 75 medium to large-sized Web sites; and the ContentZone network of 2,000 small to medium-sized Web sites. In addition, 24/7 Media licenses its Adfinity advertising management system to independent Web sites to manage and serve Internet advertising and direct marketing campaigns. The company also markets its dbCommerce software to Web commerce companies to enable the delivery of targeted promotions.
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