What's going on?
British travel ticketing company Trainline chugged onto the stock market on Friday – and investors rode its shares up 17%.
What does this mean?
Trainline sells rail and bus tickets online in 45 European and Asian countries. It was rerouted from its initial plans to “go public” in 2015 when private equity firm KKR snapped it up for $640 million. Following three years of losses, Trainline made a $13 million profit last year – and investors buying the company’s stock on Friday pushed its value up to almost $2.5 billion.
As well as Trainline selling new shares to investors, KKR sold some of its stake – but it’s still Trainline’s largest shareholder. KKR might now use some of that profit to buy the majority of Europe’s largest publishing house, Axel Springer.
Why should I care?
For markets: Investors go along for the ride.
Trainline’s stock was as hot as an e-ticket to Coachella; investors perhaps liked the tracks it’s laid down so far and itinerary going forward. The company is capitalizing on the shift to online ticketing – and has plenty of room to expand further with online bookings comprising only 39% of tickets sold in Europe’s largest travel markets. And with the winds seemingly blowing in Trainline’s favor, some investors may expect its early results to steam beyond perhaps modest expectations, leading to a first-class profit as other investors get on board and push the stock price up.
For you personally: Welcome to the future of ground travel.
While most airlines now have sleek online booking platforms, trains and buses have fallen somewhat behind. Just as Uber did with taxi rides, Trainline is aiming to bring analog rail and coach travel booking into the digital age – powered by an engine room of fresh cash that’ll help it compete with startup Omio’s global ambitions. And, as you may have noticed, when travel companies butt heads, price wars often follow (tweet this)…