Ipo maximize your offering price

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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


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,

2011.

This is a preliminary analysis of these IPOs, completed and

planned, that we prepared for a client company that was

considering going public.


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


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

It is important to note the metrics

we used. We used revenues,

revenue per user and revenue

growth.

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

growth

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

growth.

Linkedin, with less growth than Groupon, was being valued

well

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

growth.

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

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


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

(240) 200-4529

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Ipo maximize your offering price

Business

strong revenue growth

lack of growth groupon

key driver of growth

low revenue

strong value

user column

low value

client company