Thursday, January 27, 2011
Demand Media Market Cap Huge, But Green Dot Still Bigger
The IPO this week of Santa Monica-based Demand Media has drawn widespread attention, with a number of articles yesterday talking about how the firm's market cap exceeded the New York Times Company after the IPO. However, a quick look at the recent Southern California IPOs shows that Monrovia-based Green Dot still rules, at least in terms of current market cap. In intraday trading Thursday, Green Dot (GDOT) had a market cap of approximately $2.68 billion, compared to Demand Media's (DMD) $1.4 billion. RealD (RLD) was third with $1.27B in market cap, followed by ReachLocal (RLOC) with $630.6M. Inphi Corp had a market cap of $454.75M Thursday, with MaxLinear at around $357.0M. Practically, the valuations of companies at IPO do not matter as much to angel and venture investors as do the valuations at least six months after an IPO, as those investors tend to have lockup agreements for that period after a public offering. Returns also depend on how those investors choose to hold or sell their shares after an IPO.