Tuesday, April 26, 2011

Zipcar revs for initial public offering

NEW YORK-Zipcar Inc., the car-sharing company that rented rides for less than an hour, will receive expected to this week a warm reception from Wall Street for its planned initial public offering.

His followers think, skyrocketing gas prices car-sharing always popular will. You praise Zipcar's technologically-savvy and their plans for overseas expansion.

"Zipcar one of the long-awaited hot tickets in the IPO Valley," said John Fitzgibbon, founder of the IPOscoop.com. Investors are, IPOs again warming up to the market of 2008 and 2009 sputtered.

However, Zipcar was never profitable, since its inception in the year 2000. It expects to lose money again in 2011. Cars, his most important costs are not cheap.

The IPO value he would total in the middle of the expected price range around $125 million from $14 to $16 per share. The company expects revenue of about 89 million $, $46 million, of which plans you to use to pay down debt.

The company plans to trade on the NASDAQ Stock Exchange under the ticker symbol ZIP. The offer is expected to award Wednesday night, to start Thursday with the stock to trade.

In contrast to a car rental program requires no Zipcar customers a store of value key pick up to visit. Lieber, members pay an annual fee of $60 and $25 application fee to join and get a keycard. Cars are parked in their city.

Members go online to reserve a car in the vicinity, and their key card unlocks it. Hourly rates vary, typically less than $ 10. customers pay no gas.

While Zipcar, that it more cities identified dozens where it could succeed says, there are questions how far it can expand. His model works best in densely populated areas, where many residents have cars.

Zipcar, based in Cambridge, Massachusetts, is a giant among U.S. car sharing programs, operating in 14 cities. Most of its competitors are only one. It bought it major direct competitor, Flexcar, 2007.

However, Enterprise and Hertz car rental companies have their own car-sharing programs. An alliance called the CarSharing Association was also recently Zipcar's smaller competitors.

Zipcar expands campus with cars quickly on the College up to 230 colleges, up to 150 in June. Last year it moved overseas by buying u.k. rival tram Ltd.

Zipcar says that there are more than 100 u-Bahn areas around the world and hundreds of other universities as attractive markets has identified.

"If it works, then is anyone going to make a lot of money," car analyst Michael Millman said. "If it don't take I they can always the contract for the smaller and more profitable to be."

Millman said he is not sure if Zipcar's losses so far are a concern.

"I of which is, if they have a profit wanted to they could have a profit," said he, "but then they have to give up or delay growth."

Investment groups including Norwegian investment company Smedvig capital AS and a number of individual investors are also selling shares and part of the IPO proceeds.

Zipcar gets praise for the use of the technology: for example, members can receive text messages, if your reservation is almost on and to find out whether they can extend the rental.

The company has two tech prominent on its Board of Directors, AOL co-founder Steve case and former eBay CEO Meg Whitman.

Skyrocketing gas prices Zipcar in the short term, violate can, said Dave Brook, a consultant of CarSharing Portland in the year 1998 was founded. But she eventually interest drum could, he said.

Brook thinks turning point if car owners drive less than 5,000 miles per year. "" "That's when you start you think"I'm spending a lot of money for this car and not always a lot of value from it.""

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