ZillowReal estate listings site Zillow opened on the NASDAQ stock exchange this morning with a whopping $60 share price after its IPO was priced last night at $20 per share. But the $60 per share price fell quickly after the first trade and shares are currently trading around a more reasonable $34.

Zillow follows other tech websites to go public this year, such as LinkedIn, Pandora and HomeAway. All three of those also saw a strong first day price jump followed by quick drops, indicating short-term interest from many buyers. LinkedIn’s price has been trading over $100 per share the past few days but today it is sitting under $98.

A spokesperson from Florida-based IPO Boutique said Zillow’s strong open simply piggybacked on other Internet-based stocks. “IPOs from the likes of LinkedIn and HomeAway buoyed Zillow’s price today,” the spokesperson said.

IPO Boutique said only 50 of out of 300 potential institutions were given access to the initial $20 shares. With the price dropping dramatically from the $60 per share open, it’s easy to assume many institutions sold off those shares immediately.

Zillow originally set its IPO share price between $12 and $14 and then last week upped that to between $16 and $18. Interest must have been even stronger than anticipated with its $20 opening share price.

One major driver likely keeping Zillow’s price per share from staying high is that the company is still not profitable. It incurred a loss of $12.8 million in 2009 and a loss of $6.7 million in 2010. In the first three months of 2011, the company lost just $826,000, which suggests that Zillow is getting closer to generating profits. But since its not quite there yet, it’s no surprise investor interest is wildly fluctuating.

What do you think of Zillow? Do you have any interest in investing?


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