"More recently, watchers of the New York tech scene will recall Google’s purchase and shutdown of Dodge Ball."
Interesting... I wonder when Google went public... undoubtedly it was back in the heyday of small tech IPOs, otherwise they would have had to sell themselves!
Seriously though:
His other example, Wal-Mart - inflation adjusted would be >$100mm today at IPO.
To expand on hristov's list, some recent, smaller IPOs:
AcelRx: $85mm market cap (ie. post-money)
Kip's Bay Medical: $130mm market cap
Trunkbow International: $170mm market cap
Ossen Innovation: $87mm market cap
SGOCO: $80mm market cap
UniTek: $150mm market cap
through the midpoint of November. Some slightly larger ones as well that I've skipped.
Not to say that increased regulation and disclosure requirements have had a negligible chilling effect on the decision to go public, but this blows it out of proportion.
What may be a legitimate worry is that companies are choosing to stay private through sales to VCs and PE funds, saving millions in public company costs and the time that would otherwise be devoted to dealing with the general investing public. Whether this is a good or bad thing is debatable, but it does keep these companies out of reach for certain investors.
Say they're break-even on $70mm of annual revenue.
35% of annual revenue is gross profit - so of $70mm they keep $24.5mm - so say that's their operating expense number.
I think you'd have to expect a 3-5x bump in revenue (assuming gross margin stays the same and no significant growth in that operating expense number of $25mm) to justify buying at a $2bn valuation.
4x revenue growth from $250mm expected this year = $1bn revenue
Assuming they can keep up a steady growth rate at this point and you can value Hulu at 15x their net income number, this implies a value of $3,150. Which is about a 15% annualized return number over 3 years off a valuation of $2bn today.
So some of the questions are - how much do you expect online TV to grow, what percent of that market do you think Hulu will have, and successful do you think Hulu Plus and any other initiatives will be, and do you think Hulu can keep their operating expenses relatively flat?
Interesting... I wonder when Google went public... undoubtedly it was back in the heyday of small tech IPOs, otherwise they would have had to sell themselves!
Seriously though:
His other example, Wal-Mart - inflation adjusted would be >$100mm today at IPO.
To expand on hristov's list, some recent, smaller IPOs:
AcelRx: $85mm market cap (ie. post-money)
Kip's Bay Medical: $130mm market cap
Trunkbow International: $170mm market cap
Ossen Innovation: $87mm market cap
SGOCO: $80mm market cap
UniTek: $150mm market cap
through the midpoint of November. Some slightly larger ones as well that I've skipped.
Not to say that increased regulation and disclosure requirements have had a negligible chilling effect on the decision to go public, but this blows it out of proportion.
What may be a legitimate worry is that companies are choosing to stay private through sales to VCs and PE funds, saving millions in public company costs and the time that would otherwise be devoted to dealing with the general investing public. Whether this is a good or bad thing is debatable, but it does keep these companies out of reach for certain investors.