Zipcar Going IPO
June 2, 2010 5 Comments
Our beloved Zipcar we have been driving around DC, filed for initial public offering (IPO) with the Securities and Exchange Commission (SEC) yesterday to raise up to $75 million to cover their debt. Ouch!
Those of you still have some cash left, I urge you to buy their stock as I think their business model is the future of our transportation. Not to mention their model is also the new way of living green.
The company, which plans to trade on the Nasdaq under the symbol “ZIP,” did not disclose details such as the number of shares of their expected price range. Zipcar, which in 2007 acquired rival Flexcar from Revolution, currently, operates 6,500 cars in more than 50 U.S. cities, including more than 750 in the DC area.
Members reserve vehicles online or through mobile devices, use a smartcard to open the doors, then return the cars at the end of their reservations. An hourly or daily fee covers gas, insurance, maintenance, parking and emergency service.
The company has reported net losses year after year, and acknowledges that the car sharing market is still nascent and that it may not be able to turn profitable by 2011 and beyond. For the three months ended March 31, 2010, the company incurred net loss of $5.3 million and reported revenue of $33.24 million.
This is a huge debt, maybe they spent a lot of money on research but it will pay off rich dividends in the near future because such cars are the future of automobile.
I’ve been using Zipcar since I moved back in DC from the EU back in 2006. I’m a very happy zipcar member. They are absolutely fantastic in urban settings. I have not owned a car for 4+ years and couldn’t be happier. Haven’t had to go do an oil change in 4 years. Not for everybody of course, but I’m ideally located for it to work for me. I would personally invest in the IPO, since I believe that if gasoline ups to $5/gallon, more customers will prefer this method of transit. Even if gasoline were free, I prefer this for myself.
Honestly, if you live and work in the city with once or twice travel outside of the city, Zipcar is perfect. Why would you want to own a $30k car? Not to mention the cost of insurance, maintenance, gas, etc.
Given the current market, let’s hope the wall street won’t add more debt on top of their $75 mil post IPO.
Here is their demo of their iPhone App: