* Shares at $28.40, 58 pct above $18 IPO price
* Sold more shares than expected
* Trading on Nasdaq under symbol "ZIP"
* Goldman Sachs and JPMorgan led underwriters
(Adds sector comparison, analyst comments, financials)
NEW YORK, April 14 Shares of Zipcar Inc ZIP.O
soared 66 percent in early Nasdaq trading on Thursday as
investors sought to buy into the leader of the growing U.S.
Shares added $10.10 in their debut to trade at $28.40,
after the IPO raised $174.3 million on Wednesday, having
attracted enough demand to sell more shares and price above the
Nearly a decade old, Zipcar is a leader in so-called
car-sharing, a service that allows people to rent cars at an
hourly or daily rate and park in convenient reserved spots. The
service is especially popular in urban areas and around college
campuses, where fewer people own cars and parking is scarce and
"This interest in a green, socially responsible company
underpinned by a high growth prospect is driving investor
demand here," said Josef Schuster, founder of Chicago-based IPO
investment firm IPOX Schuster LLC. "It was a very well-marketed
deal... It's a unique story and for the time being it's
Zipcar's model has caught on so well that larger car rental
companies such as Hertz Global Holdings Inc (HTZ.N), Enterprise
Holdings Inc [EPRIH.UL] and U-Haul, owned by Amerco (UHAL.O),
have started rival car-sharing services.
But the sector is still in its infancy and Hertz's and
Enterprises's segments dedicated to car sharing are just a
fraction in size compared with Zipcar. Rising energy prices and
expansion of metropolitan areas are giving car sharing and
Zipcar a perfect opportunity for growth, analysts said.
"It is a model that is very attractive to fairly large
segment of population," said Avondale Partners analyst Fred
Lowrance. "For people who don't want to spend $25,000 on a car
because they get to drive it only once a week, this is a great
Zipcar is backed by venture capital investors including
Steve Case's Revolution Living, Benchmark Capital, Greylock
Partners and Smedvig Capital.
The company has yet to become profitable, reporting an
accumulated deficit of $65 million in 2010 and warning
investors it expected a net loss in 2011 as well.
But Zipcar's revenue has been climbing, growing 42 percent
to $186 million in 2010 after adding 24 percent in 2009.
Zipcars are mostly found on the streets of 14 big cities
and 230 college campuses around the United States, Canada and
Britain. To expand further in European markets, Zipcar bought a
British peer, Streetcar Ltd, in April 2010.
In February, the company also added former eBay Inc
(EBAY.O) CEO Meg Whitman to its board.
The company said it planned to use the proceeds from the
IPO mostly to pay down debt -- in part to former Streetcar
shareholders -- but also to expand its business, marketing and
The company's stockholders sold 1.4 million more shares
than originally planned in the IPO, which priced at $18 per
share, above the proposed range of $14 to $16.
Schuster said the relatively small size of the deal could
have supported the soaring trading on the first day.
Goldman Sachs and JPMorgan led underwriters on the IPO.
(Reporting by Alina Selyukh and Megha Mandavia in Bangalore;
Editing by Tim Dobbyn and Gunna Dickson)