Shares of OpenTable Inc (OPEN.O) closed their first trading session up 59 % last Thursday following the restaurant reservation company’s initial public offering, in the best first day performance for a US company in over 18 months. The stock ended up US$11.89 at US$31.85 on NAS, a day after the company raised a more-than-expected $60 million in its IPO.
The stock started trading at a 22.5% premium over the US$20 IPO price, which was above the expected range, reaching an intraday high of US$35.50. “It’s such a small deal and people are interested in the brand name, plus it’s the first real VC (venture capital)-backed IPO by a Silicon Valley firm in a while,” said Nick Einhorn, an analyst with Connecticut-based Renaissance Capital.
OpenTable sold a modest 3 million shares, something Einhorn said will make the stock more volatile and could explain its strong debut. The stock’s run-up had many analysts scratching their heads and saying it may be ridiculously overvalued, with a high risk of a big pullback
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