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OpenTable soars, but we're not out of this yet

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The NASDAQ yesterday became the scene (virtually speaking) of the best IPO in more than 18 months, with tech and financial industry observers cheering the news as maybe, just maybe, signaling better days ahead.

Can you blame them? With a soaring debut -- shares leapt 59 percent during trading -- the IPO was the first by a U.S. company on NASDAQ this year and this week's second initial public offering by a VC-backed technology play.

Oh, yeah. Yesterday's IPO was for an online restaurant reservation service.

That's right, OpenTable (NASDAQ: OPEN) shares ended up $11.89 at $31.85. With today's economic climate being what it is, can anyone be blamed for the outpouring of optimism around OpenTable's debut?

Well, yes. Though I agree OpenTable is a useful online service (of which I'm a longtime user,) I'm not convinced it warrants all the enthusiastic attention lavished on it by some market watchers.

Fortunately, I'm not alone.

"This is reminiscent of the 1999-2000 IPO pricings," Scott Sweet, a senior managing partner with IPO Boutique, said in a research note. "This IPO environment has not and should not see a pricing like what was chosen, considering the restaurant business is very prone to the recession."

In a Reuters report, IPO Desktop President Francis Gaskins called OpenTable's opening-day debut "over the top."

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