IPO of the Week: The Trade Desk

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Company Description

Established in 2009, Trade Desk is an advertising technology company. Trade Desk provides a self-serve technology platform for ad buyers, which the programmatic advertising platform provides an omnichannel that allows advertising agencies to bid and compete in real-time advertising inventory auctions, display and manage advertising campaigns. Trade Desk is a buy-side only platform (DSP).

Business Model

The Trade Desk generates revenue by charging clients a platform fee based on a percentage of a client’s total spend on advertising inventory purchase, data, and other add-on features. Trade Desk focuses on ongoing master service agreement as opposed to episodic insertion orders.

IPO HIstory

On 09/20/2016, The Trade Desk made its highly anticipated IPO debut on NASDAQ Global Market led by Citigroup, Jefferies, and RBC Capital Markets. The stock was priced at $18.00 per share, the high-end of its elevated offering price range of $16.00 – $18.00/share. With 4,666,667 shares offered and the 15% over-allotment option fully exercised, the company was valued approximately $700 million at offer yet closed the first day with a valuation over $1.1 billion. TTD opened at $28.75/share, a 59.72% pop from its offer price, and climbed to close the first day of trading at $30.10/share with a 67.22% initial return. Trade Desk was first included in the IPOX® U.S. 100 Portfolio on 12/16/2016 and currently weighs approximately 0.66% of the portfolio.

Historical Performance

Growth Outlook

Company Stock Symbol IPO/Spin-off Date Initial Return Offer to Date 2019 YTD Beta to S&P EPS 2018 Revenue (in millions) P/S ratio
The Trade Desk TTD US 09/20/2016 67.22% 1130.44% 90.67% 1.84 $1.92 477.29 117.6x
Rocket Fuel FUEL US 09/09/2013 93.45% Acquired by Sizmek in 2017 for $145 million, a -3.35% premium
AOL AOL US 12/10/2009 Spin-off Acquired by Verizon in 2015 for $4.4 billion, a 17.40% premium
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Josef Schuster
Dr. Josef Schuster is the founder of Chicago-based IPOX Schuster LLC and chief architect of the IPOX® Indexes. The IPOX methodology is implemented in an IPO and spin-off strategy at Catalyst Funds. Before founding IPOX, Dr. Schuster pursued his academic work on European IPOs in the Financial Markets Group (FMG) at the London School of Economics (LSE), where he completed his MSc and PhD and conceived the idea to start IPOX. He regularly appears in the media as an expert in global New Listings and respective investment products.

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