AppNexus Files Confidentially for IPO
November 30 2016 - 2:30PM
Dow Jones News
AppNexus Inc., an automated online-advertising technology
company, has confidentially filed paperwork for an initial public
offering that is likely to come in the second quarter of 2017,
according to people familiar with the matter.
The company, which was valued at $1.8 billion in a 2015 funding
round, could seek a valuation between $1.5 billion and $2 billion
in the offering, though pricing talk is still fluid, the people
said. AppNexus has tapped Goldman Sachs Group Inc. and J.P. Morgan
Chase & Co. to serve as the lead underwriters on the offering,
they added.
The company's decision to move forward with an offering is the
latest sign that a dry spell for technology company IPOs could come
to an end next year. Snap Inc., the parent of mobile app Snapchat,
also has confidentially filed paperwork for an IPO that could come
as early as March and value the company at as much as $25
billion.
So far this year, 23 technology companies have raised $3.8
billion in U.S. IPOs, according to Dealogic, down from $9.3 billion
in 29 deals this time last year and $39 billion in 55 deals over
the same period in 2014. Many of the most highly valued startups
are choosing to wait, raise funding privately or sell themselves
rather than move forward with a public listing.
AppNexus is among a cohort of companies that sought to shake up
the online-advertising business model by directly connecting buyers
and sellers of ad space. But the business has become overcrowded
and commoditized, hitting the stocks of ad-tech companies that have
gone public in recent years. Shares of Rubicon Project Inc. and
Rocket Fuel Inc., among others, initially soared before falling far
below their IPO prices.
Yet the dearth of tech company IPOs has boosted Trade Desk Inc.,
the only ad-tech company to debut this year. The company's shares
are currently trading nearly 50% above its IPO price, reflecting
investors' hunger for new listings.
AppNexus has said it has distinct technology, having built a
platform connecting to publishers that rivals Alphabet Inc.'s
breadth of digital advertising options via Google. News Corp
invested $10 million in AppNexus earlier this year as part of a
strategic partnership. News Corp is the parent of The Wall Street
Journal.
AppNexus recently restructured its business model to streamline
how it sells advertisements to clients, and in doing so cut roughly
10% of its staff. The company hopes the changes, which were made in
the third quarter, will boost profits and lead to a higher IPO
valuation, according to a person familiar with the matter.
Write to Maureen Farrell at maureen.farrell@wsj.com and Telis
Demos at telis.demos@wsj.com
(END) Dow Jones Newswires
November 30, 2016 14:15 ET (19:15 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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