Shares of ZipRealty Inc. priced at $13 each, rose as high as $17.50 in early trading and were at $16.10, a gain of $3.10, or 23 percent, at noon Eastern time today. ZipRealty filed for an offering of 4.55 million shares.

Trading volume of Zip stock is strong today at 3.4 million shares.

The Emeryville, Calif.-based company expects to net proceeds of about $44.5 million from the IPO, and said it will use money raised from the offering to generate working capital. Zip also said it might use some of the proceeds for potential acquisitions.

Zip has been in the brokerage business since 1999. The company warned investors in its SEC filings that its “Internet-enabled residential real estate brokerage business model remains relatively unproven” and that it will have to continue to recruit, hire and retain qualified agents and maintain access to MLS home listings in order to grow.

“In addition, economic trends could have an impact on our business; for example, an increase in interest rates could lead to fewer residential real estate transactions and possibly reduce the demand for our services,” Zip stated in the filings.

Through the first nine months of this year, ZipRealty generated $44.7 million in revenue and had $2.24 million in net operating income, according to the filings. “We returned to profitability in the second and third quarters of 2004, primarily as a result of higher average net transaction revenue and increased transactional volume due to our increased ZipAgent force and seasonal factors,” Zip stated in the filings.


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