Subscription-only review website Angie’s List debuted on the Nasdaq today, after selling 8.79 million shares at the high end of its expected $11 to $13 range during its initial public offering. The company’s stock made impressive gains in trading this morning, opening at $18 a share—a 39 percent increase over its IPO price of $13.
Although analysts weren’t surprised by the company’s first-day success, they’re not convinced that Angie’s List shares will remain as strong going forward, according to the Wall Street Journal.
Despite the fact that Angie’s List charges a fee for access to its database of user-generated local business and service reviews, the company isn't profitable. In the first nine months of 2011, Angie’s List revenue rose 46 percent to $62.6 million, compared to the same period a year earlier, while membership grew 77 percent to nearly a million members (it has since passed that mark).
Still, increased marketing and operating expenses took a toll, and the company's net loss doubled to $43 million.
Much like Groupon, which debuted earlier this month, Angie’s List has spent big on marketing in hopes of building its subscriber base. The company recently said that it plans to use part of its IPO proceeds to further boost advertising, and warned of continued net losses in the future.