Hulu IPO would be good sign for the markets. Amazing that they got this shareholders together in the first place.
But I wouldn't invest. Definitely not for the long run.
They will still be controlled by the large media companies and if Hulu's profits rise they will just charge Hulu more for the license. So Hulu's earning potential is limited.
Report: Hulu Prepping To File For $2 Billion IPO
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Re: Report: Hulu Prepping To File For $2 Billion IPO
#22I'm considering buying in. Anyone else?
Why are you considering buying in? Are you familiar with their financial situation? Do you know how much money they make? I can't find any reliable numbers. This is the best I could find: http://www.businessinsider.com/hulu-ceo-talks-ipo--here-are-... So their net profits are estimated $70M this year (before tax, I assume). Their growth rate is the only thing that justifies 2B valuation. So my main point is - we don'…
Following the numbers in that article here:
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
$1bn revenue * 35% gross profit margin = $350mm gross profit. $350mm - $25mm operating expenses = $325mm pre-tax income. $325mm less 35% taxes = $210mm net income.
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?
Re: Report: Hulu Prepping To File For $2 Billion IPO
#23Nice to see TechCrunch got the memo about how to write like engadget ... summarize someone else's article, link to 10 of your own.
Wonder when they'll tuck the source link away somewhere discrete.
Re: Report: Hulu Prepping To File For $2 Billion IPO
#24Earlier quoted context omitted.
I don't really know how it works to get into an IPO, but I'm very interested too. Netflix and Hulu represent the (slow but certain) change of video broadcasting.
I'm no expert, but it's simple. You just follow the company until the day their stock is available on the market, and buy. An interesting IPO was Google's. Usually, Wall St. banks get first shot at buying stock initially before it's available to the wider public. Google thumbed their nose at Wall St. and allowed anyone to buy their stock directly in a kind of dutch auction. The banks were furious at this insubordinat…
That's not correct. That's buying on the secondary markets. To get into the IPO you have to have an account and an allocation from a brokerage that is participating in the initial distribution.