Today Zipcar (NASDAQ:ZIP) soared big in its IPO debut, opening at $30 after the shares priced at $18 a share. I remember about four years ago at a party talking to a few young urbanites who worked at Zipcar telling me about their idea: car-sharing for citydwellers. You don't need a car all the time, but you do need it occasionally.
This is nothing like the rental car model, with Zipcar you pay a monthly fee and then by the hour or by the day for your usage. From today's Marketwatch article:
Zipcar operates a car-sharing service in 14 cities and more than 230 college campuses across the U.S. and U.K. It offers self-service cars for use by the hour or by the day, and claims 560,000 members. The company has more than 8,000 vehicles, including popular choices like the Mini and Prius, located in conveniently placed parking spaces.
“Zipcar has almost a cult following,” said Scott Sweet, senior managing partner at IPO Boutique. “They’re strategically located in big cities where parking is tough, as well as many universities.”
If there's one theme that I always like to invest in, it's new, disruptive ideas. And Zipcar has one. Is it profitable? Of course not! What IPO is profitable? That's why they're selling shares. (Facebook now has almost no reason to ever IPO as they're extremely profitable and already well-funded.)
With gas prices on the rise and student debt on the rise, it seems a natural that where Gen X college kids all had cars, Millenials - at least in urban settings - are much more likely to go without one, and then use Zipcar when they really need a car. From the page where I got this image from...
Get 24/7 access to Zipcars parked right on campus! Simply reserve online, let yourself in with your Zipcard and drive. Our low hourly and daily rates always include gas and insurance.
You only need to be 18+ to join. Members age 18-20 can use a dedicated group of Zipcars that live on campus. Members age 21+ also have access to thousands of Zipcars all around the world.
Their marketing is squarely aimed at college kids and that makes a world of sense. Anyway, I would rather jump on this trend early than wait a year to see how it pans out. This successful IPO will set the stage for a positive slant to financial coverage of the stock, and hell, as some of these zipsters (as the company calls them) grow up, they might even plow some of their investment dollars into ZIP themselves.