Kayak Finally Set to Take the Plunge Into Uncertain Market

Kayak is expected to start trading tomorrow, after waiting nearly a year for the turbulent IPO waters to subside.

Later this afternoon, Kayak is planning to sell 3.5 million shares at $22 to $25 each, to raise as much as $100 million, according to its latest document filed with the Securities and Exchange Commission.

But based on strong demand, the company could end up pricing its shares even higher, reports CNBC.

At the top of its current range, the company would be valued at nearly $1 billion.

Starting tomorrow, the online travel company will trade under the ticker symbol KYAK on the Nasdaq exchange.

Since the company first filed to go public last year, a lot has happened, making it difficult to gauge how it will be received by investors.

Across the broader technology sector, several tech companies have gone public in recent months, some faring better than others, like LinkedIn and Yelp versus Zynga and Groupon.

In the online travel business specifically, several big moves could value the company higher.

Google acquired ITA Software for $700 million to add travel airline information to its search results, and TripAdvisor spun off from Expedia to create two separately traded companies. Since then, both are trading at almost $48 a share, up from $27 at the time of the split.

As for Kayak, the wait also gave it the time to report four consecutive quarters of profitable growth.

In the first quarter, it reported a profit of $8.1 million, reversing a loss of $12 million in the same period a year earlier. (The loss was mostly attributable to a $15 million impairment charge related to the discontinuation of the SideStep brand name.) Revenue in the first quarter totaled $73.3 million, compared to $52.7 million a year earlier.

In Kayak’s online road show video, the company stressed that it’s not just another online travel agency, but a technology company. It believes it can out-innovate many other companies, because it isn’t busy managing call centers or flying planes.

But as a customer-facing service, why doesn’t it need call centers?

Kayak CTO and co-founder Paul English explained that customer inquiries are handled by engineers, connecting a very close bond between what they are creating and what the customers are saying about it. The complaints aren’t considered resolved until the bug is fixed on the site.

Maybe now that the company is going public, that’s how Kayak will take calls from shareholders, too?

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