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Adtech Firm PubMatic Jumps in First Day of Trading

Adtech firm PubMatic's stock jumped from its initial public offering price of $20. The estimated IPO price range had been $16 to $18.
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PubMatic  (PUBM) - Get PubMatic, Inc. Class A Report, which offers a cloud platform for so-called programmatic advertising transactions, soared from its initial public offering price of $20.

Programmatic advertising involves using software to buy ads, instead of doing it by direct negotiations.

At last check the stock was up 34% at $26.82. It has traded on Wednesday up as much as 66% at $33.16.

The IPO price topped the $16-to-$18 range PubMatic had estimated. It sold 5.9 million shares, raising $118 million in the IPO. 

Jefferies and RBC Capital Markets were the lead underwriters.

For the first nine months of 2020, PubMatic posted profit of $7.8 million, triple the $2.5 million of the year-earlier period. Revenue reached $62.8 million, up 19% from $52.7 million a year earlier. The Palo Alto, Calif., company employs 518.

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“Our cloud infrastructure platform provides superior monetization for publishers by increasing the value of an impression and providing incremental demand through our deep and growing relationships with buyers,” PubMatic said in its prospectus. 

“We are aligned with our publisher and app-developer partners by being independent.”

As for risks, “our business depends on the overall demand for advertising and on the economic health of our current and prospective publishers and buyers,” the company said. 

“For example, due to the covid-19 pandemic and the recession … in the second quarter of 2020 advertising demand on our platform decreased and did not recover to pre-covid-19 levels for two months.”

The IPO market has exploded since the stock market crash in March, with the Renaissance IPO ETF  (IPO) - Get Renaissance IPO ETF Report gaining 66% in the past six months. AI, an artificial intelligence software provider, also began trading with a bang Wednesday, recently standing at $92.71, more than double its IPO price of $42.