Projecting that Rubicon's shares will likely trade “several dollars above the high end” of its projected $15 to $17 pricing, Pivotal Research Group analyst Brian Wieser estimated the offering will “equate to an enterprise value of approximately $750 million.”
Wieser cited other recent ad tech IPOs and their trading as benchmarks.
While Rubicon has been characterized by others as an SSP, or a sell-side platform, the company has maintained that its role has been to develop a neutral infrastructure to facilitate the flow of programmatic trading in the digital advertising marketplace.
“Whatever ad tech term we use to describe what Rubicon does, its technical integration with ‘over 700 sellers of digital advertising including approximately 40% of the comScore 100’ produces a significant advantage over many other ad tech companies whose revenue streams are primarily transactional (involving short-term one-off revenue generating activities) by nature,” Wieser writes, adding, “While Rubicon engages in its own direct transactional sales activities with buyers, much of its relative advantage is rooted in its publisher integrations. While these arrangements are not permanent, they require some amount of time to change should a publisher prefer to work with another SSP or otherwise manage its programmatic sales differently. This is what we mean when we characterize Rubicon’s business model as relatively sticky.”