ipo maximize your offering price

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  • www.TheSecuritiesAttorneys.com

    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

  • www.TheSecuritiesAttorneys.com

    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

  • There is nothing Wall Street

    loves more than growth.

  • I am going to reveal here an evaluation of some initial

    public offerings we prepared on November 27,


  • This is a preliminary analysis of these IPOs, completed and

    planned, that we prepared for a client company that was

    considering going public.

  • www.TheSecuritiesAttorneys.com

    When you attack the market with these kinds of quantitative tools, you find that the mystery falls away and you can see clearly

  • www.TheSecuritiesAttorneys.com

    Your underwriter will prepare studies like this to show at what valuation he can use to market

    your stock in your IPO

  • November 2011Company Valuation

    (millions)\Forward P/E

    Price/Sales Uniques (millions)

    Angie's List 413 N/A 5.4 1 (all paid)


    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)


    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

  • It is important to note the metrics

    we used. We used revenues,

    revenue per user and revenue


  • These metrics were mentioned

    in public discussions about these companies.

  • Now here is a discussion of each company

  • 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.

  • Note the low

    value per user, low revenue per user and lack of


  • Groupon had shown the most growth of any

    of the list

  • If you look at the value per user column, and

    compare it with the rest, you can see the premium the market put on


  • Linkedin, with less growth than Groupon, was being valued


  • Investors perceived that

    Linkedin's users are locked in,

    unlike Groupon

  • Note that Zynga has a strong value per user

  • This is interesting

    as there were doubts about its ability to keep momentum a fad business

  • Summing it all up, what can we

    learn here?

  • To me, revenue growth jumps out as a key driver of


  • Groupon, LinkedIn and Zynga all had

    strong revenue growth coupled

    with strong revenue per user

  • The more you look at this, the more you understand

    that growth drove their value

  • We know now that Groupon and

    Zynga failed to continue their

    growth, and as a result, their

    stocks crashed

  • From this chart, we can deduce several things

  • First, while the market valued

    revenues, it discounted profits

    almost entirely

  • To me, revenue growth jumps out as a key driver of


  • Growth of revenues is the

    key metric

  • Therefore, you should focus on

    growth, customer lock in and

    having a unique service

  • This is only a beginning

    We can show you how to maximize the value of your

    stock offering

  • This will increase the amount you

    raise and minimize the

    cost of dilution in your IPO

  • www.TheSecuritiesAttorneys.com

    Questions email me at John.Lux@ Securities-Law.info

    (240) 200-4529

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