In the expectation game of public markets, mobile ad network Millennial Media is off to an impressive start.
After making its public debut this morning at $13 a share, the company's stock more than doubled, hitting $27.90, before falling to about $24.60 by early afternoon.
"We were expecting it to do very well, but even this is a strong performance," said Anupam Palit, senior equity analyst at GreenCrest Capital. "Investors are clearly excited about this company."
The stock is partly getting a boost from a strong overall IPO market, he said, pointing to the pop experienced by ecommerce site CafePress, which also went public today.
But investors are also impressed by Millennial Media's own momentum, he said. According to International Data Corp., Millennial Media is gaining share in mobile display ads against Apple. Between 2010 and 2011, Millennial Media's share of the market climbed from 15 to 17 percent, while Apple's share declined from 19 to 15 percent. As smartphones become more powerful and ubiquitous, the company expects opportunities in mobile advertising to expand.
In an SEC filing, Millennia Media said it plans to use the proceeds from the IPO for working capital and general corporate functions, such as expanding its international operations and product development. It also said it could use the funds for the acquisition or licensing of complementary businesses.
While some recently public tech companies have watched their stock price fall below the offer price after first-day pops, Palit expects Millennial Media to retain its valuation over time.
The company might lose some steam over the next couple of weeks, he said, "but over time, I think this is going to be a core holding for a lot of people who are looking at this space."