The initial public offering of Cheap Tickets (Nasdaq:CTIX), which sells discount airfare on its Web site, was a major success on Friday. Shares climbed 108 percent, closing up 16-1/4 to 31-1/4 after trading as high as 39. The IPO was originally priced at $11 to $13 (US$), before high demand raised the offering price to $15.
Cheap Tickets CEO Michael Hartley said the $48 million raised from the IPO will enable the company to maintain a leadership position in the industry and further enhance customer services.
But the competition in online travel sales is fierce, and it remains to be seen how many players will remain once the eventual shakeout happens.
On Thursday, online travel agent Priceline.com announced that it plans to go public and sell 10 million common shares of stock at $7 to $9.
This came one day before shares of competitor Preview Travel fell more than 17 percent, shedding 3-5/8 to 17-11/16 after PaineWebber downgraded it to “neutral” from “buy.”