Rocket Fuel Lives Up to Its Name in First Day of Trading

Priced at $29, stock tops $60 on the day of IPO

Rocket Fuel, a DSP that advertises campaign creation by artificial intelligence and includes inventory on Twitter and Facebook, was priced at $29 a share yesterday before its IPO. Today, the stock opened at $59.95 and climbed to more than $62 before hovering in the mid-fifties for the rest of the day. Is it 1999 again?

No, said president Richard Frankel, adding that the company has been under scrutiny for a while. "The top-buy investors have studied us very carefully," he said. "Doubling at the opening is a great example of investor confidence." No kidding.

Frankel said that the company distinguishes itself in the very broad DSP marketplace with proprietary technology. "Our solution is about using machines—software robots—to run campaigns without human intervention," he said. "What other campaigns have focused on is helping humans to run camapigns—machines can run faster and create value. Customers, Frankel said, simply give Rocket Fuel a budget, a start date, an end date and their goal. "Their platform runs the entire camapaign without any human touching it."

The exec likens the rapid growth of the ad exchange world to "a comet crashing into the earth and changing the ecosystem." His company, he said, is making the most of the shift in the way inventory is supplied and deployed. The company is majority banner inventory, by the way—it sells 82 percent display and 18 percent video (and the video percentage is up).

Revenue for Rocket Fuel was about $54 million in Q2 of this year. The enthusiasm around the IPO bodes well for Twitter—Rocket Fuel sells inventory for both the microblogging service and Facebook (both of which run their own ad exchanges).

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