Xoom Zooms on First Trading Day
Xoom.com Inc., a company that lures computer users to its Internet site with free services and then tries to sell them products, more than doubled in its first day of trading Wednesday. It was further evidence that investors are rushing to the shares of “e-tailers,” new companies peddling goods online.
Xoom.com sold 4 million shares, a 31% stake, at $14 on Tuesday, raising $56 million and valuing the company at $183 million. On Wednesday, the shares surged $20.44 to close at $34.44 on Nasdaq.
The rally pushed Xoom’s market value to $450 million. The shares are selling for 85 times trailing 12-month revenue.
The 2-year-old San Francisco-based company provides its 4.5 million members free services, such as Internet home pages, e-mail and chat rooms. Members pay no fees to join but are solicited over the Internet to buy various products such as computer software and consumer electronics.
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