Shopping.com Makes an Auspicious Debut

Enjoying a boost from fellow dot-com darling Google(GOOG), Shopping.com(SHOP) shares soared more than 50% on their first day of trading Tuesday after pricing at the high end of their range.

Shopping.com shares climbed as high as $28.43 before settling recently at $27.50, still up $9.50, or 52.8%, from their $18 IPO price. Israel-based Shopping.com sold 6.87 million shares, raising $123.7 million.

"I thought it would open up with a premium, but not this kind of premium," Sal Morreale, who tracks IPOs for Cantor Fitzgerald in Los Angeles. "It's a stock that's riding the coattails of a Google-type deal."

Morreale said he believes the IPO benefited from taking place on a strong day for the market and one day after Google's market cap surpassed rival Yahoo!'s(YHOO).

"It's the right business at the right time, with the growth of Amazon (AMZN) and eBay(EBAY) and other online Web sites," he added. "It's a good comparative Web site. ... It works."

Shopping.com operates an online comparison-shopping service in which it receives revenue every time a user clicks through to a merchant's Web site. The site is the fourth-largest online shopping destination behind eBay, Amazon and Yahoo!

Renaissance Capital, a Greenwich, Conn.-based independent research firm that tracks new issues, noted that that Shopping.com has come a long way since its first ill-fated attempt to go public four years ago, months before the Internet bubble burst.

At that time, Shopping.com had a miniscule $525,000 in trailing sales and mounting losses, Renaissance noted. By contrast, it is now the largest online comparison shopping service in the U.S. with more than 20 million users a month and with revenue of $67 million in 2003. That was more than double sales of $29.1 million in 2002 and more than five times sales of $12.7 million in 2001.