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Another Ad Tech IPO Test, as Rubicon Project Gets Ready to Race

Sometimes investors hate ad tech, sometimes they love it. What are we going to see on Wednesday?

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Peter Kafka covers media and technology, and their intersection, at Vox. Many of his stories can be found in his Kafka on Media newsletter, and he also hosts the Recode Media podcast.

Are investors ready for more ad tech? Or are they already tuckered out?

Every time we’ve asked that question in the last year, we seem to get a different answer. Now we’ll see what we can learn from The Rubicon Project, a high-profile ad tech company that will start trading on the New York Stock Exchange on Wednesday, under the “RUBI” ticker.

Last summer, investors seemed uninterested in the first crop of ad tech companies that went public, and today outfits like Tremor Media and YuMe are still trading below their IPO prices.

Since then a new crop of ad tech companies, including Criteo and Rocket Fuel, have fared much better.

One warning sign for Rubicon: The company sold its initial shares last night at $15 apiece — the bottom end of the $15 to $17 range it had initially said it was looking for. Criteo and Rocket Fuel, by contrast, moved their pricing up during the course of their IPOs, and Criteo eventually sold above its expected range before it traded on the open market.

What’s that? You say you’re not interested in following a company’s shares right out of the gate, because that doesn’t tell you much about the company itself? Fair enough: Rubicon is a fast-growing, money-losing company that sells software that connects digital advertisers and publishers. Last year it lost $9.2 million on sales of $83.8 million. That’s up from $2.4 million and $57.1 million in 2012.

If you’re bullish about Rubicon’s prospects, you can argue that automated ad buying and selling is going to be increasingly important, and that the company, which processed $485 million in ad spending last year, is set to handle much more in the next few years. You might also argue that buyers and sellers will be looking for alternatives to Google. On the other hand, there aren’t a lot of companies that have taken on Google, in any ad field, and fared well.

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