Zipcar Makes a Staggering Debut with Its IPO
Debuting at $18 per share, with an expected $14-16 opening, car-sharing service ZipCar came up with its initial public offering on Wednesday and it surely registered overwhelming results with its stocks ascending 67% to $30 per share.
Raising $174.3 million, the firm sold 9.7 million shares by the end of the day and it opened at $30 per share on Thursday morning, trading under the symbol ZIP.
ZipCar has made its presence in more than 200 markets in last 10 years and to avail its services, customers have to enroll themselves for an annual membership to be able to reserve one of 8,000 ZipCar vehicles nationwide. Customers are supposed to pay by hour for its use and the rates come included with gas and insurance.
Though more than 560,000 members have enrolled themselves for its services, mostly in the metropolitan areas but still the firm is waiting to register a profitable quarter as it has reported to lose $64.5 million since it was founded.
The firm released an official statement which stated, “It plans to use the proceeds from the IPO for the repayment of certain debt, business expansion, working capital and other general corporate purposes, including the development of new services, sales and marketing activities and capital expenditures”.
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