The world’s largest car sharing service, Zipcar saw its share price soar as it floated on the stock exchange for the first time yesterday.
The firm’s value exceeded all expectations as shares soared up 56 per cent on its first day as a public company.
According to the Financial Times, the short term car rental firm sold 9.5m shares at $18 a share late on Wednesday, raising both the number of shares offered and the price, which was projected to be $14 to $16 a share.
Investors seem confident of the rising popularity of car clubs such as Zipcar, as more people take to flexible car use over car ownership particularly in overcrowded cities.
Zipcar,based in the US and founded in 2000, now has more than 560,000 members and over 8,000 vehicles in urban areas and college campuses throughout the United States, Canada and the United Kingdom. The firm offers more than 30 makes and models of self-service vehicles, available for its members to hire. They pay an hourly rate for the vehicles, after reserving them by phone or online and collecting them from a nearby location.
The money raised from the initial public offering will be used to repay certain debts, expand the business, increase working capital and development of new services, sales and marketing activities.
