Online real estate listing company Trulia’s (TRLA) shares are up more than 20% from the company's market debut last week, benefiting from a dearth of IPOs, as well as being in one of the hottest stock sectors of 2012.
Yet the success of Trulia’s offering has little to do with it being a special company, says Barry Randall, manager of the Crabtree Technology investment model at Covestor. He cast doubt that the stock can maintain its momentum in a recent interview with E-commerce Times.
According to Randall, Trulia is, “a money-losing website whose losses grew even larger in their most recent quarter." He suggests that investors should be wary of the stock, as well as its sector.
Its early success may be partly because of investors comparing it to Zillow (Z), a more established and profitable online real estate company, that is trading at nearly double its $20 IPO price more than a year ago.
You can read the full interview with Randall here.