Technology Programmatic IPO

AppNexus and The Trade Desk reported to be close to filing for IPO


By The Drum | Editorial

June 29, 2016 | 4 min read

Ad tech outfits AppNexus, and The Trade Desk are reportedly close to filling for an initial public offering (IPO).

AppNexus and The Trade Desk are close to an IPO according to AdExchanger

The New York-based, AdExchanger cited multiple sources claiming both ad tech companies are close to submitting S1 forms with the Securities and Exchange Commission in the USA, indicating plans for an IPO in the coming months.

In the case of AppNexus, it has been expected to float on the stock exchange for some time (many had expected it in the last year), with AdExchanger additionally reporting that The Trade Desk may already have filed confidentially under the SEC's "emerging growth" rules.

If both IPOs (or even just one of them) happen this year it would prove significant developments in the ad tech sector for 2016. Public listings are not unprecedented in the ad tech sector.

However, most have experienced difficult times in the market. The below chart tracking the share prices of such outfits (compiled using data sourced via Google Finance) demonstrates some of the difficulties experienced by ad tech companies (for instance, look at RocketFuel’s closing stock price over the last 12 months).

Ad tech stock prices at quarterly close in the 12 months to May 2016

Some have speculated that despite providing year-on-year growth, analysts, and investors ‘just don’t get ad tech’.

For example, despite posting strong revenue gains in its last quarterly earnings this year (71 per cent year-on-year growth), Rubicon Project’s valuation was down as much as 30 per cent in the initial aftermath of the revelation. Some felt this was unfair.

However, both The Trade Desk and AppNexus have been making moves to single themselves out from the rest over the last year, with the former moving to better explain the workings of its technologies to the wider market, specifically brands.

Meanwhile, AppNexus (15 per cent of which is owned by WPP) has been aggressively pitting itself against Google throughout 2016 in a bid to underline its point-of-difference in the market, plus the value it provides to advertisers.

Speaking late last year with The Drum, AppNexus president Michael Rubenstein shared his thoughts on how 2016 would be a momentous year for the ad tech sector.

He went on to say: "The cycle of independent ad tech companies is playing out. You had all these companies funded in 2007/08, and some of them emerged as strong companies, but lots are not working very well. The latter can't survive independently, and so I've got the feeling that a lot of those companies will have to find ways to survive or they'll go out of business..."

Neither company has publicly commented on the initial report. Read the rest of the Michael Rubenstein interview here

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