OpenTable IPO Shows That Dumb Cash Is Starting To Look For New Investment Vehicles

from the good-or-not? dept

Fri, May 22nd 2009 2:07pm — Mike Masnick

There's been lots of buzz in Silicon Valley thanks to OpenTable having a 1999-style IPO, where the stock popped 70% on the first day (which, means that OpenTable effectively left a huge chunk of change on the table). But, of course, many people are asking if this finally means that IPOs can come back in fashion for venture-backed startups. Just a few weeks ago, we discussed how some believed that tech IPOs were primed to come back, though I was (and still am) skeptical. As the first link above shows, looking at OpenTable's financials makes you wonder how anyone would invest at the dollar value it hit. It makes little sense. So, this could just be an anomaly, as investors who have been sitting on cash for too long and are desperate to find different places to dump it got excited about a "new" tech IPO. But, unless the companies going public have better fundamentals, it seems like they'll start finding better places to put their cash. Instead, this seems like those sitting on too much cash venting a little steam just because.

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Filed Under: ipos
Companies: opentable

6 Comments

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AnonCow, 22 May 2009 @ 3:16pm

It will be well under $10 by the end of the year or earlier if they miss their next quarter's number.

How soon after an IPO before you can short it?
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- Kiley Austin-Young, 31 May 2009 @ 10:39am
  
  Re: Shorting OPEN
  Shares can't be lent by the underwriter for 30 days. However, if your broker has shares to lend you can short. I'm currently short OPEN with TradeStation.
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  - Gordon Gekko, 13 Jun 2009 @ 5:41pm
    
    Re: Re: Shorting OPEN
    No you're not. I have a premiere account with TS. SEC forbids shorts on IPOs for the first 30 days.
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Ivan, 22 May 2009 @ 3:22pm

They're cashing out:)
I work for the competition...I've seen lots of postings as to why they're raising money and whether or not the stock will go up. Their website rocks, their Iphone app is pretty impressive, they definitely have the business traveler in their pocket. Their weakness is centered around their hardware. Who needs hardware in the internet world? There are 4 or 5 web-based systems like ours springing up around the nation. We don't use hardware. No hardware = no support costs = lower rates = competition.

As soon as restaurants realize OT is taking taking away traffic from their website (why go back to the restaurant website?) by converting the restaurant's website visitors to theirs and charging them for it at the same time...there will be some backlash. We fit the replacement bill nicely;)
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- frank, 7 Feb 2010 @ 11:00am
  
  Re: They're cashing out:)
  Hi, Ivan...I would like to have a conversation with you. If you can get in touch with me we cann arrange a ccall: franmartin@gmx.net
  br
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Techsupoort, 25 May 2009 @ 11:09pm

RE:
Their website rocks, their Iphone app is pretty impressive, they definitely have the business traveler in their pocket.
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