Millennial Media shares fall 19 percent on acquisition, earnings news
By By Scott Dance and The Baltimore Sun
Aug 14, 2013 at 6:02 PM
Shares of Millennial Media lost 19 percent of their value in trading Wednesday on news that the Canton mobile advertising company would buy a competitor mostly in exchange for stock, and that its losses widened in the second quarter.
The stock closed at $6.90 on the New York Stock Exchange, down $1.60 from the previous day's close. The acquisition and earnings were announced after the market closed Tuesday.
Millennial plans to acquire Boston-based rival Jumptap for more than $200 million, with the privately held company's shareholders receiving 24.6 million shares of Millennial along with $12 million in cash. Millennial officials said the deal would make its share of the market for advertising on smartphones and mobile friendly websites rival that of Google.
In the second quarter, Millennial's revenue grew 45 percent to $57 million compared with the same quarter of 2012, but its losses widened from $2.2 million to $3.1 million.
Millennial has grown from a startup out of a local incubator to go public in March 2012, but shares have slumped since that initial public offering, priced at $25 per share. Wall Street analysts have shown dissatisfaction with the company's growth.