Shares of Trulia soar in NYSE debut

Thu Sep 20, 2012 2:46pm EDT

1 of 4. Traders work at the post that trades Trulia Inc. on the floor of the New York Stock Exchange, September 20, 2012.

Credit: Reuters/Brendan McDermid

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(Reuters) - Trulia Inc (TRLA.N) shares surged more than 40 percent in the online real estate listing service's market debut on Thursday, as investors bet on an improvement in the housing market and growth of the company's mobile business.

The stock opened at $22.10 after pricing at $17. By the afternoon, it was up 47.6 percent at $25.10 on the New York Stock Exchange. The IPO raised $102 million on Wednesday.

San Francisco-based Trulia's website and mobile applications provide data on home prices, neighborhoods, rentals and other local information.

Trulia is the first major technology IPO since the summer lull. The company is one of seven IPOs that were set to hit the market this week.

"This is an opening bell for other IPOs," said Pete Flint, CEO of Trulia.

The IPO comes after a successful flotation last year from rival Zillow Inc (Z.O). Shares of Zillow have more than doubled year to date, trading on Thursday at $46.10.

Based on Wednesday's closing price, Zillow has a stock market valuation of $1.3 billion, more than twice Trulia's $500 million market cap, based on Thursday's pricing.

"A discounted valuation within the proposed offering range reflects Trulia's status as 'second-best' to peer Zillow," Morningstar analyst James Krapfel wrote in a recent note.

Investors were attracted to Trulia because the global real estate market is so large and the Internet has only just begun to transform it, Flint said, adding that Trulia's mobile business also interests investors.

Some tech companies that have recently gone public, most notably Facebook Inc (FB.O), have struggled to respond to the rapid switch by consumers to accessing the Internet through smartphones and tablets.

Smaller screens, versus personal computers, mean there is less room to include ads - one of the main ways Internet companies make money from their sites and visitors.

Trulia's mobile products and ads generate higher average monthly revenue per user than its similar web-based services, Flint said.

Mobile users often browse Trulia when they are standing outside a home they are considering buying or driving around a neighborhood that interests them. These customers often respond to advertising on Trulia's mobile apps by calling real estate agents directly from their smartphones, Flint said.

"We get a price premium on this," he said. "As the web shifts to mobile we're in a really strong position."

A nascent recovery in the United States housing market has also helped, Flint added.

"The recent data on home sales and starts was up significantly year over year," he said. "We're still in a fairly challenged market, but we're probably past the worst of it."

Late on Wednesday, four other IPOs priced, including commercial real estate investing company Spirit Realty Capital Inc (SRC.N) and financial services firm National Bank Holdings. Results were mixed, however, with three of the companies pricing lower than expected.

(Reporting by Olivia Oran and Alistair Barr; Editing by Jeffrey Benkoe, Maureen Bavdek and Leslie Adler)

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