Investors to Ad Tech Stocks: No Thanks
Remember when Groupon, Facebook and Zynga went public, and learned that the stock market didn’t think nearly as much of them as their private backers did?
This year’s story has the same plot and different names.
Most people haven’t heard of Millennial Media, Tremor Media and YuMe. But in the ad tech world, they’re a big deal, because they’re the most prominent ad tech companies to go public in the last few years.
They also happen to be ad networks in fast-growing sectors. Millennial is focused on mobile, and Tremor and YuMe do video.
None of them are making investors happy.
Things got worse yesterday, when Millennial announced it was buying rival mobile ad net Jumptap for $225 million. Investors trashed the deal, and brought down Tremor and YuMe in the process. Via Google Finance:
Feel free to argue the relative merits of each company — Millennial’s fans, for instance, argue that the merger makes the company big enough to take on Google, Facebook and Twitter; its detractors say those guys will crush them, regardless. And it could just be that Wall Street has a problem with ad networks specifically.
But it sure seems like Wall Street is looking at anything that has to do with ads, and tech, and holding its nose.
That’s presumably why Jumptap, which had raised a reported $122 million, was willing to sell instead of going public itself. And I’m reasonably sure that helped Adap.TV, which isn’t really an ad network, scuttle its IPO plans and sell to AOL instead.
The next big test for ad tech was supposed to be Criteo, the French retargeting company that has raised a ton of money. It’s an open secret that Criteo has been aiming for an IPO this fall. Let’s see if they want to wait this market out a bit.