Shares of video-hosting provider Vimeo fell 12.85% on Tuesday, its first day of trading as a publicly traded company after being spun off from Barry Diller’s IAC internet conglomerate.

Vimeo stock began trading on Nasdaq under the symbol “VMEO.” It closed at $45.39 per share, down from its price of $52.08 on Monday. That gives it a current market capitalization of about $8.5 billion.

This January, Vimeo said it raised $300 million in new equity funding, giving it a pre-money valuation of $5.7 billion, double what it was three months earlier.

As a result of the spinoff, IAC’s interest in Vimeo is now held directly by IAC shareholders. As previously announced, IAC shareholders received 1.6235 shares of VMEO stock for each IAC share held as of the close of business on May 24. Vimeo is the 11th public company to be spun off from IAC, joining the ranks of companies including Match Group, Expedia, LendingTree, HSN (now part of Qurate) and Ticketmaster (now part of Live Nation Entertainment).

“We think Vimeo’s biggest challenge will be a myriad of competitors from a variety of angles as the shift to video streaming comes in many forms,” BMO Capital Market analyst Dan Salmon wrote in a research note earlier this month. Competitors range from YouTube to smaller video-hosting providers like Brightcove and Kaltura.

Prior to Vimeo’s stock trading on Tuesday, Vimeo CEO Anjali Sud (pictured above) said in a statement, “This is a proud moment for Vimeo, but just the beginning. Looking ahead, as an independent public company, we are well positioned to keep innovating with urgency to expand our software suite and put the full power of video in the hands of every business and team in the world.”

Vimeo provides a suite of video tools for businesses and independent creators. It has more than 200 million users and as of the end of March had 1.6 million paying subscribers, up 25% year over year.

For the first quarter of 2021, Vimeo reported $89.4 million (up 57% from the year prior) and net income of $3.3 million (compared with a net loss of $20.3 million in Q1 2020). The New York-based company held $316 million in cash and equivalents and no debt as of March 31.

In reporting results May 5, Vimeo told investors that it will increase its investments in 2021 and that it doesn’t expect to be profitable for the full year on an adjusted EBITDA basis. The company said it expects year-over-year revenue growth of around 40% in the second quarter, decelerating to 30% growth through the end of 2021, before accelerating in 2022 “as the investments from this year start to show results,” said CFO Narayan Menon.

In April, Vimeo announced that the 11 members of its board of directors would include filmmakers Spike Lee and George C. Wolfe alongside Sud and IAC CEO Joey Levin (chairman of Vimeo).

Vimeo became part of IAC in 2006 through IAC’s $26 million acquisition of Connected Ventures, a collection of businesses whose main attraction was College Humor.