Commentary

Ad Tech M&As Trumped IPOs In 2014

While there was a flurry of “exits” in the ad tech space in 2014, most came in the form of mergers and acquisitions, and only a handful of large companies in the space went through an IPO -- namely Rubicon Project and TubeMogul.

It’s possible that companies sought buyers rather than IPOs because of the track record that current publicly traded ad tech firms are putting together.

At the end of 2013, if one were to buy one share each from eight large public ad tech companies -- Millennial Media, Rocket Fuel, Tremor Video, Criteo, YuMe, Marin Software, Rubicon Project and TubeMogul -- it would have cost $158.04 (Rubicon and TubeMogul didn’t go public until April and July 2014, respectively, but we included their day-one prices nonetheless).

As of December 29, 2014, those eight shares would be worth $110.85, a loss of nearly 30%.

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TheWall Street Journalcompiled a roundup of the declining stock prices of public ad tech companies midway through 2014, noting that Rocket Fuel, Tremor, Criteo, Yume, Millennial Media and Rubicon project were all down at least 13% on the year (as of June 2014).

Only Criteo has been able to turn that around. TubeMogul, which went public after the WSJ’s roundup, is also up on the year.

Barring a big rise in stock prices during the final two days of 2014, Millennial Media (currently down 77.7% on the year), Rocket Fuel (down 73.1%), Tremor Video (down 51.9%), YuMe (down 35.6%) and Marin (down 18.7%) will all see their stock prices close 2014 below where they entered. Rubicon’s stock price is also down 16.1% from its $20.09 day-one price.

As previously noted, TubeMogul (up 74.2% after trading began in July) and Criteo (up 16.6% since beginning of the year) are in position to close 2014 in the green; however, both of those companies have questions as well.

TubeMogul has been public for just half a year, and its stock price was relatively flat until mid-October. And while Criteo is up over 15% on the year as a whole, its shares nearly reached $60 at the beginning of March before falling to $25 just two months later.

M&As trumped IPOs in 2014, not just in “success” and volume, but in intrigue. The giants came to play this year, as Google, Facebook, Twitter, Yahoo, AOL and others all made noteworthy acquisitions, some of which were in the hundreds-of-millions of dollars price range. The tech and data arms race is underway.

2 comments about "Ad Tech M&As Trumped IPOs In 2014".
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  1. Mike Azzara from Content Marketing Partners, December 30, 2014 at 11:08 a.m.

    This is interesting. But what would be more useful is insight into why. Is it something about investor expectations being set to high? Or is there something fundamentally wrong with the market or the technology?

  2. Seth Ulinski from TBR, December 30, 2014 at 12:39 p.m.

    Interesting data points above. Worth noting that Criteo and TubeMogul have been Criteo successful with two different business models. Criteo: managed services model, targeting SMB market; TubeMogul: largely focused on enabling brand advertising clients with SaaS tools. Most of the other vendors are in a transitional period from a delivery model standpoint, expanding capabilities, or both.

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