Hotel search platform Trivago GmbH (NASDAQ:TRVG), which is majority owned by online travel giant Expedia Inc (NASDAQ:EXPE), lists on Nasdaq today but at a price well below market expectations.
The German-based company priced its initial public offering (IPO) yesterday at US$11 per American depository shares (ADS), much lower than the indicated range of $13 to $15.
The amount of ADS’s in the offering were also reduced to 26.1 million, down from a planned level of 28.5 million, meaning the company will raise US$287mln.
Expedia paid €477mln ($531mln) for a 62% stake in Trivago in 2012.
Traders said the underwhelming pricing of the Düsseldorf-based company's offering reflects some concerns among investors that it may be too reliant on a few online travel companies for its revenue.
Majority shareholder Expedia is also one of Trivago’s biggest customers, and along with brand affiliates such as Travelocity and Hotwire comprised 35% of total revenues in the past year to the end of September.
The downsized IPO also comes on the tail-end of a difficult year for stock market offerings, with the total amount raised down 42% so far this year, according to data from Thomson Reuters.