OpenTable IPO Shows That Dumb Cash Is Starting To Look For New Investment Vehicles

from the good-or-not? dept

There’s been lots of buzz in Silicon Valley thanks to OpenTable having a 1999-style IPO, where the stock popped 70% on the first day (which, means that OpenTable effectively left a huge chunk of change on the table). But, of course, many people are asking if this finally means that IPOs can come back in fashion for venture-backed startups. Just a few weeks ago, we discussed how some believed that tech IPOs were primed to come back, though I was (and still am) skeptical. As the first link above shows, looking at OpenTable’s financials makes you wonder how anyone would invest at the dollar value it hit. It makes little sense. So, this could just be an anomaly, as investors who have been sitting on cash for too long and are desperate to find different places to dump it got excited about a “new” tech IPO. But, unless the companies going public have better fundamentals, it seems like they’ll start finding better places to put their cash. Instead, this seems like those sitting on too much cash venting a little steam just because.

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Companies: opentable

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Comments on “OpenTable IPO Shows That Dumb Cash Is Starting To Look For New Investment Vehicles”

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Ivan (user link) says:

They're cashing out:)

I work for the competition…I’ve seen lots of postings as to why they’re raising money and whether or not the stock will go up. Their website rocks, their Iphone app is pretty impressive, they definitely have the business traveler in their pocket. Their weakness is centered around their hardware. Who needs hardware in the internet world? There are 4 or 5 web-based systems like ours springing up around the nation. We don’t use hardware. No hardware = no support costs = lower rates = competition.

As soon as restaurants realize OT is taking taking away traffic from their website (why go back to the restaurant website?) by converting the restaurant’s website visitors to theirs and charging them for it at the same time…there will be some backlash. We fit the replacement bill nicely;)

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