Cloud Stocks: 2 Haves and 2 Have-Nots

The broader market opportunity is huge, but not every company is ready for the big leagues

       

Not Ready: Tremor Video

TremorVideo185 Cloud Stocks: 2 Haves and 2 Have NotsDate of IPO: June 26, 2013
Return: -18%

Tremor Video (TRMR), which operates a video ad network, had a rough IPO. The company priced its deal at $10, which was below the expected $11-to-$13 range. By the end of its first day of trading, shares were off by 15%.

And this happened despite Tremor being a top company in its industry.

TRMR’s core technology, called the VideoHub, allows customers to display their ads across desktop computers, smartphones, tablets and even connected TVs. The network includes about 500 websites and mobile apps, with more than 200 involving exclusive partnerships. And Tremor is going after substantial growth opportunities; eMarketer estimates that the video market will grow by 29% annually to $8 billion by 2016.

So why the disappointment from Wall Street?

One problem might be Google (GOOG). With its ownership of YouTube and the Android mobile operating system, the company is poised to squeeze large amounts of the profits from the market.

But perhaps the biggest issue is the fact that there’s little differentiation between Tremor and the spate of other ad networks, including Hulu, BrightRoll, Adap.tv, Videology and YuMe (YUME). Getting public investors’ attention is difficult enough, but even more so when it’s difficult to show how your product stands out.


Article printed from InvestorPlace Media, http://investorplace.com/ipo-playbook/cloud-stocks-2-haves-and-2-have-nots/.

©2014 InvestorPlace Media, LLC

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