Download - Ipo maximize your offering price
Disclaimer
This is not legal or investment advice of any kind
Seek competent advice from qualified attorneys and investment bankers
Your situation may vary
The more you know about finance and business, the more you can profit
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This will show you how IPOs are valued
Knowing how Wall Street underwriters look at IPO pricing is key to positioning your company to maximize valuation and minimize dilution
I am going to reveal here an evaluation of some initial
public offerings we prepared on November 27,
2011.
This is a preliminary analysis of these IPOs, completed and
planned, that we prepared for a client company that was
considering going public.
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When you attack the market with these kinds of quantitative tools, you find that the mystery falls away and you can see clearly
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Your underwriter will prepare studies like this to show at what valuation he can use to market
your stock in your IPO
November 2011
Company Valuation (millions)\
Forward P/E
Price/Sales Uniques (millions)
Angie's List 413 N/A 5.4 1 (all paid)
Friend-finder
40 1.19 0.12 484
Groupon 16,700 187 12.24 183
Linkedin 6,940 248 6.56 135
Pandora 2,080 N/A 9.72 90
Zynga 15,000 152
Company Revenues (millions)
Revenue Growth %
Value per User
Revenue per User
Angie's List 78.7 48 413 (all paid)
8.7 (all paid)
Friend-finder
338 -5 0.08 0.7
Groupon 1,118 (nine months)
699 116.78 7.82
Linkedin 354(nine months)
120 51.41 2.62
Pandora 103 23.11 2.26
As you can see, they all have their own
unique characteristics that have to be taken
into consideration in evaluating the
whole group.
Angie's List is unique in that all of its members pay. The service is to provide customer written reviews of local services.
All of their subscribers pay cash money, so the revenue per user is high and
the value per user also is high.
Friendfinder is an online dating
service. Their IPO crashed and they
are being sued. We can discount their
numbers as an outlier in the data.
If you look at the value per user column, and
compare it with the rest, you can see the premium the market put on
growth.
We know now that Groupon and
Zynga failed to continue their
growth, and as a result, their
stocks crashed
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