Zipcar's Stock Market Shares Zoom Upward Day After Successful IPO

Zipcar stockholders sold more shares than expected during the initial public offering on Wednesday.

Today, during the membership-based car sharing company's first day on the stock market, shares of Zipcar have beaten expectations again, rising upward by as much as 66 percent, the Wall Street Journal reports.

Zipcar, which provides rental cars to paying members by the hour or by the day, currently has 560,000 members, affectionately known as "Zipsters." Based upon the 38.6 million outstanding Zipcar shares trading at $30 per share, Zipcar is currently estimated to be worth $1.2 billion.

The rental company sold 9.68 million shares at its initial public offering at $18 each, raising $174 million, WSJ notes, more than expected by stockholders, who estimated they would sell 8.3 million shares at $14 to $16 each.

The company, not profitable nor expecting to be this year, plans to use IPO money to pay down debts. Revenue, however, climbed by 42 percent in 2010 after growing by 24 percent in 2009, Reuters reports.

Zipsters aren't required to pay for car insurance or gasoline, which could raise costs for the company this year as oil prices continue to rise around the globe.

Comments

[bryanzth]

10:18 PM on 04/16/2011

How nice for ZipCar.  But we use I-GoCar in Chicago. Shhhh, it's a non-profit! ;0)

Remember, boys and girls, when there are stockholders, THEY are the customer, not the... well, not the customers.

BZ.

[DSOTM]

01:22 PM on 04/16/2011

I like the idea but I think it is going to go the way of satellite radio; it will be cool at first then peter off.

[pdxist]

07:59 PM on 04/16/2011

It's been around for years. It's very convenient. I've never had to buy a car. I take public transport most of the time, and when I really need a car, I pay $7 for an hour.

[DSOTM]

09:54 AM on 04/17/2011

I was referring to the stock price, not the company itself, I think their stock will tank just like XM/Sirrius did.

[ross nichols]

07:34 AM on 04/15/2011

Pearlstein had great article in Wash Post on how the Ryan plan is all lies,distortion.Must be read,In Fridays paper.

[richardgordon]

07:07 PM on 04/16/2011

Read the piece. Yes. It is good. What baffles me is how Republicans can peddle their $*#t to a gullible base. In every other part of the world the stuff these people come up with is considered laughable. But in America apparently half the country believes in the Republican platform. Fundamentally it is the responsibility of the electorate. If they cannot be bothered to educate themselves about how their futures are being hijacked by a small but powerful elite then they will wake up one day to find all of their freedoms have been taken away from them and that only a small plutocracy of elites have all the property, all the freedom and all the power

[buckfalcon]

07:05 AM on 04/15/2011

This would be better if they used cars that burned wood or coal - instead of gasoline.

[pdxist]

08:03 PM on 04/16/2011

Roughly half the vehicles in my area are hybrids.

[DCreamerII]

05:19 AM on 04/15/2011

I think the idea will catch on. City dwellers don't need a car everyday and if you can reduce your transportation cost, liability and hassle but still have access to a vehicle whenever you really need one it makes sense. We would all be better off if we walked, biked and use mass transit more for all the obvious reasons. The idea of targeting university students is brilliant because it generates a loyal customer base that will adopt the product as part of an urban lifestyle. The higher gas gets the more appealing this idea will be because you can really live without a car in the city if you want to and at 4 to 5 dollars a gallon plus insurance, payments, maintenence and parking this looks better and better. Just do the math.

[P51MUSTANG]

12:20 PM on 04/16/2011

I'm sure the key to profitability is only leasing to people with a very good driving record, and who won't trash, or hot-rod the rental vehicles.

As such I"m not sure college students are a good target market. Maybe if you required a certain GPA, students "too smart" to destroy other people's property.

Look at the average dorm room or frat house if you want to see how students treat stuff that isn't their personal property.

[pdxist]

08:06 PM on 04/16/2011

It's been around for years, though, and seems to be successful. You do have to have a good driving record, but nothing too onerous.

http://www.zipcar.com/portland/apply/membership-requirements

[Roadgeek]

10:36 PM on 04/14/2011

Soaring fuel costs will make Zipcar's road to profitability that much longer. They can't pass along these costs too much to their consumers without seeing membership stagnate or drop.

[sej]

12:32 PM on 04/15/2011

and what's the alternative? The person owns the car 365 days per year and has to pay for fuel, insurance, etc.?

[Vik Dhawan]

05:50 PM on 04/17/2011

I kinda disagree, if fuel prices rise fewer people will want to carry the whole costs of car ownership, so this might work in their favour as they can lower their entire expenditure on transport.

[freespeech2]

08:35 PM on 04/14/2011

I didn't understand this when I first heard it and I still don't...the company hasn't been profitable and people still want to buy in?

[Jack Davies]

11:24 PM on 04/14/2011

They think it's cool! And it is, right until they inform you that they are forked and done.

[pdxist]

08:09 PM on 04/16/2011

"Revenue, however, climbed by 42 percent in 2010 after growing by 24 percent in 2009." When your income is rising at a parabolic rate, you're a worthy recipient of investment.

[Dianekkdi]

08:07 PM on 04/14/2011

http://www.zipcar.com/how/whatsincluded

If I lived in the city, I might consider it. Doesn't look half bad.

Once upon a time long long ago, I lived in Boston and discovered my car was a magnet for parking police. I spent in parking tickets what I could have spent on zipcar membership three fold.

Hope it works out. Buy hybrids.

[born 2b different]

04:58 PM on 04/15/2011

Why didn't you just park legally?

[P51MUSTANG]

12:21 PM on 04/16/2011

Go live in Boston, NYC, SF, anywhere a while and you'll know the answer to that.

[Red Russet]

07:23 PM on 04/14/2011

Great for the IPO crowd - but this company is gonna go the way of crocs - it's a fad, if gas goes highr, it will stagnate and slowly turn south.

[pdxist]

08:13 PM on 04/16/2011

To the contrary, I think if gas prices rise, people will want to ditch their vehicles, making Zipcar an attractive service for when you really do need to make a trip with a car.

[Norma Desmond]

06:20 PM on 04/14/2011

you are stupid...

[blurredmolly]

07:55 PM on 04/14/2011

x2

[Norma Desmond]

06:21 PM on 04/14/2011

you are _stupid.

[blurredmolly]

07:55 PM on 04/14/2011

x2

[StopMakingSense2]

05:48 PM on 04/14/2011

Sharing cars is something the commies would do! This is socialist the republicans should out law it! I'm sure the car and oil companies will be happy to sponsor it..

[ecrichert12]

07:14 PM on 04/14/2011

Why would a public company be 'socialist'? Their shareholders put money at stake in pursuit of profits which will sink or swim based on whether they can make their business model run profitably.

What could be more capitalist than that?

[ema123]

07:23 PM on 04/14/2011

Yeah, they have more debt than revenue, the american way! i worked in investment banking and untill the late 90s you never heard of a company going public before it could actual show profit. But like Cheney said debt doesnt matter. see where this company is a year from now, the Ibankers im sure will profit but the ublic buying the stock wont.

[RaceCondition]

02:44 PM on 04/14/2011

Zipcar is a great company to do business with. I'm a happy Zipster.

[ema123]

07:24 PM on 04/14/2011

I just would buy thier stock.