LifeLock, Inc. (NYSE: LOCK) is another example of where the market for initial public offerings is just not quite what some were hoping for. The identity theft and identity protection solutions provider seems to have a viable business model. Still, the trading action into and after its IPO has been poor at best.

LifeLock shares price at $9.00, which was already under the $9.50 to $11.50 expected price range from the underwriters. Shares have an official post-IPO high of $9.04 but the debut trading day closed at $8.36. Now shares are down almost 4% more at $8.04 on the day.

One additional negative here is a Seeking Alpha article detailed more of the same observation we had on the matter. The company’s promotional expenses are off the chart at 46% of revenues. It also showed that the company is spending 18 months of revenues to acquire each new customer and customer acquisition costs are rising faster than revenues.

The market has voted that LifeLock is a maturing or less valuable business model than what the company is trying to represent. Its ad and marketing budget pretty much speaks for itself. When shares were still private we saw that some expected valuations were close to $1 billion for this identity protection service. Based upon a prospectus share count of 83,379,068 common shares, the market cap is closer to $760 million now.

JON C. OGG

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