IPOops: 3 IPO Lessons Kayak Should Take from Facebook

July 10, 2012

What IPO lessons can Kayak learn from Facebook’s infamous flame-out in order to avoid the same over-hyped fate?

There are indeed, writes Fast Company’s Kit Eaton. While Kayak’s announced $100 million public offering is a fraction of Facebook’s off-the-charts offer, there are still a significant number of pitfalls to avoid, and the travel aggregator has to find a way to manage rather than play up the hype. “If the market or media gets too excited about Kayak’s offering, possibly even because it’s coming so soon after Facebook’s, the company may be advised to maneuver to deflate the hype,” Eaton writes. Of course, that’s easier said than done, but taking care to manage the things the company can control, such as drafting its S-1 in a matter-of-fact tone, should help.

Another Facebook folly to avoid is allowing last-minute concerns to taint positive growth projections. “A lot of Facebook’s issues arose because at the eleventh hour it began to worry that its user adoption rate was slipping and that near-future finances as portrayed in its pre-IPO financial package may have been overly optimistic,” writes Eaton. “Between now and IPO, while following the relevant restrictions on its financial activities, Kayak has to keep [its] positivity going — enough to convince investors that it has a definite path to even greater growth, perhaps through acquisitions.” For more lessons Kayak should take from Facebook’s IPO mistakes, read Eaton’s full post at Fast Company.