Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Take a Bite Out of This Tasty IPO

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

With casual-dining chains struggling and higher-end eateries suffering even more, now would seem like an atrocious time for OpenTable to go public. Tell that to the online reservations specialist, which filed with the SEC on Friday.

Never heard of OpenTable? You need to eat out more. gives foodies the ability to make free reservations at some of the trendiest restaurants in town, sometimes collecting reward points in the process. The company services the actual restaurants with an electronic reservation-book platform that combines online bookings with telephone requests.

Believe it or not, this is a growth industry. Revenue grew 41% to $41.9 million through the first three quarters of 2008, after notching top-line gains of 63% and 51% in 2006 and 2007, respectively. OpenTable has been profitable on an annual basis since 2006.

Surprised? You shouldn't be. The more competitive the environment, the more intense the quest to drive online leads. (Nasdaq: RATE  ) continues to grow its ad revenue from financial-services providers, even as banks and credit card companies face major headwinds. The Knot (Nasdaq: KNOT  ) is growing in its wedding-services niche, even as couples scale back their matrimonial budgets.

OpenTable offers exposure at a time when even the hottest restaurants have empty tables. Several rival sites, including Yelp, CBS' (NYSE: CBS  ) Chowhound, and IAC's (Nasdaq: IACI  ) Citysearch, offer editorial and community eatery reviews, but OpenTable also brings the convenience of online reservations to the table.

The restaurant-facing operations are also an easy sell, since managers are able to quickly recall previous visits, dining preferences, and any special occasions through the Web-connected reservation book.

In short, OpenTable clearly works for both parties. The number of participating restaurants in North America has grown from 1,611 in 2003 to 8,788 as of last September. More than 25 million diners were seated as a result of reservations through the first nine months of 2008. Would many of those guests have simply called in their reservations if the website didn't exist? Probably, but why take the chance?

This has definitely been a dead market for new stock offerings, though both of last year's final IPOs -- webhost RackSpace (NYSE: RAX  ) and online educator Grand Canyon Education (Nasdaq: LOPE  ) -- are Internet companies.

OpenTable isn't a lock to IPO. As many of its restaurateur clients know, just because you set the table doesn't mean that someone will be hungry for what you have to offer.

OpenTable deserves better than the apathy it will likely receive. You can't judge this tempting offering by the bland menu cover.

Some interesting ways to profit from the IPO void:

Bankrate and The Knot are Motley Fool Rule Breakers recommendations. Try any of our Foolish newsletters today, free for 30 days

Longtime Fool contributor Rick Munarriz is a fan of new stocks. He does not own shares in any of the companies mentioned in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.

Read/Post Comments (0) | Recommend This Article (15)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 822504, ~/Articles/ArticleHandler.aspx, 10/27/2016 8:39:57 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,169.68 -29.65 -0.16%
S&P 500 2,133.04 -6.39 -0.30%
NASD 5,215.97 -34.29 -0.65%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/27/2016 4:00 PM
CBS $56.41 Down -0.37 -0.65%
CBS CAPS Rating: ***
IAC $65.48 Down -0.78 -1.18%
IAC/InterActiveCor… CAPS Rating: *****
RATE $7.65 Down -0.40 -4.97%
Bankrate CAPS Rating: **
XOXO $18.31 Down -0.11 -0.60%
XO Group CAPS Rating: **