Internet Brands IPO May Mark Return to Normalcy

It's getting quiet out there. The IPO market isn't what it was even a couple of months ago.

Just ask Internet Brands. The El Segundo, Calif.,-based operator of small, consumer-focused Web sites managed to go public this month, unlike a growing crowd of other companies being forced to pull or postpone their IPOs.

But its entry into the public markets came with a cost. Instead of going forth with its initial plans to sell 9.57 million shares between $10 and $12 a share, Internet Brands settled for selling 6 million shares at $8 each.

Instead of raising as much as $115 million, the company took in $48 million, or about 42 cents for every dollar it had hoped to raise.

The market seems to agree with that revised valuation. Internet Brands closed its first day of trading at $8, unchanged from the offer price -- despite trading volume of 1 million shares, which was more than 10 times the average daily volume since then. The stock closed Friday at -- you guessed it -- $8.

This is a far cry from the trend of first-day pops from earlier this year. And it may be a sign that the IPO market has, for now at least, returned to the cold-eyed sobriety it displayed earlier this decade.

But what does it tell us about Internet Brands? And what should investors be thinking about as they appraise this latest entrant into the Internet sector?

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