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LoopNet, Inc. (LOOP) completed its IPO yesterday, selling 6 million shares – 2 million of which were sold by some of the existing shareholders – at $12 per share. The $72 million in gross proceeds was down slightly from the $86.25 million that was anticipated when the company filed its initial S-1 on March 1, 2006. The shares will begin trading this morning. While LOOP is very profitable, the low barriers to entry in this space may encourage potential competitors. Also note that it is generally not a positive sign when some of the existing shareholders use the IPO as an opportunity to reduce their holdings. I think that LOOP would make a nice acquisition for someone. Remember that EBAY purchased Rent.com, a site that was generating $40 million in revenues, for over $430 million. From the S-1: BUSINESS We are a leading online marketplace for commercial real estate in the United States, based on the number of monthly unique visitors to our marketplace, which averaged approximately 500,000 unique users per month during 2005 and over 590,000 per month during the first three months of 2006, as reported by ComScore/MediaMetrix. ComScore/ MediaMetrix defines a unique visitor as an individual who visited any content of a website, a category, a channel, or an application. Our online marketplace, available at www.LoopNet.com, enables commercial real estate agents, working on behalf of property owners and landlords, to list properties for sale or for lease by submitting detailed property listing information including qualitative descriptions, financial and tenant information, photographs and key property characteristics in order to find a buyer or tenant. Commercial real estate agents, buyers and tenants use the LoopNet online marketplace to search for available property listings that meet their commercial real estate criteria. By connecting the sources of commercial real estate supply and demand in an efficient manner, we believe that our online marketplace enables commercial real estate participants to initiate and complete more transactions more cost-effectively than through other means. As of March 31, 2006, the LoopNet online marketplace contained approximately 360,000 listings for more than $296 billion of property available for sale and more than 2.8 billion square feet of property available for lease. To use the LoopNet online marketplace, all users must register and become registered members. Registration requires that a user create a user record, which includes basic contact information such as name and a working email address, and also requires that a user accepts our Terms of Service. Basic membership is available free-of-charge, and enables members to experience some of the benefits of the LoopNet offering, with limited functionality. LoopNet premium membership is available for a monthly subscription fee and provides enhanced marketing exposure for property listings and full access to LoopNet property listings, as well as numerous other features. The minimum term of a premium membership subscription is one month, with discounts available for quarterly or annual subscriptions. A customer choosing to cancel a discounted annual or quarterly membership will receive a refund based on the number of months the membership was used and charging the customer at the monthly rate rather than at the discounted quarterly rate. As of March 31, 2006, we had more than 1.2 million registered members and more than 64,000 premium members. For the quarter ended March 31, 2006, our registered members viewed property profiles on our website approximately 28 million times. In addition to our primary LoopNet offering, we also operate BizBuySell, an online marketplace for operating businesses for sale, which we acquired in October, 2004. As of March 31, 2006, BizBuySell contained approximately 38,000 listings of operating businesses for sale. We also generate revenues by selling our LoopLink online real estate marketing and database services suite to commercial real estate firms and by selling advertising and sponsorships on our website to parties who are seeking to market products or services to the LoopNet registered member base. SEC filings: sec.gov Company websites: loopnet.com bizbuysell.com | ||||||||||||||
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