Peter Kafka

Recent Posts by Peter Kafka

Investors to Ad Tech Stocks: No Thanks

Liam Walsh v Paul Appleby - Commonwealth Super Featherwight Title Fight

Dean Mouhtaropoulos Getty Images Sport

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.

Millennial Media actually had a very nice bump when it IPOed last year, but since then it has been struggling, and this year its stock price fell off a cliff.

But Tremor Media and YuMe stumbled out of the gates: Both companies priced below their initial target this summer, and things haven’t gotten better.

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:

google finance tremor yume millennial

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.


Latest Video

View all videos »

Search »

Another gadget you don’t really need. Will not work once you get it home. New model out in 4 weeks. Battery life is too short to be of any use.

— From the fact sheet for a fake product entitled Useless Plasticbox 1.2 (an actual empty plastic box) placed in L.A.-area Best Buy stores by an artist called Plastic Jesus