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Earlier quoted context omitted.
Mille, i.e. Latin for a thousand. Thus MM = 1000 x 1000 = 1,000,000. I rarely see MM used to denote a million outside the financial world. I have never seen a job, for example listing remuneration as "circa 120M" meaning 120,000
It's widely used in advertising/marketing. CPM is Cost Per Thousand.
I just looked at LinkedIn's P/E. It's almost a thousand. How is anyone valuating the company in such a way that could even assume they would increase their revenues 50 times over in the next few years?
I just looked at LinkedIn's P/E. It's almost a thousand. How is anyone valuating the company in such a way that could even assume they would increase their revenues 50 times over in the next few years?
Consider a company with $100M in revenue, $1M in profit, and a market cap of $1B. PE is 1000. Now say this company has a shot at doubling revenue in the next few years without incurring additional cost. They will then have $200M in revenue, $101M in profit, and the PE will be 10.
Just looking at P/E in isolation is like judging a programmer by how fast they can type. You need to take a broader approach to reading financials and understanding the underlying business.
I haven't followed LinkedIn close enough to have an opinion on the current valuation. You may be right that it is overvalued, but the PE ratio isn't a very good indicator in isolation of expected future earnings.
Wow. 3MM raised, 119MM exit. 40x return, and they made that 3MM last 4 years from 2008-2012 with revenue. Congratulations!
The good news is that since the employees owned some we can be sure that they saw some of that 119M$. That being said their site died :-) [1] Random note: It seems to me that that KK would be the appropriate unit for millions (thousand-thousands) and MM would be Million Millions or (10^12, or trillions.
FU money @ $7 million requires about 6% ownership.
And that's assuming their wasn't a high multiple liquidation preference for any of the investors.
[Investors here: http://www.slideshare.net/about/investors]
That's not to say a couple of hundred thousand dollars for being an employee isn't bad. But the chef isn't going to become a millionaire.
Congrats to team SlideShare. Good product! Wondering whats the goal of LinkedIn for this acquisition? It is not a people acquisition. And SlideShare is already integrated with LinkedIn's platform. So I'm curious!
It seems like a strategic acquisition. LinkedIn looks poised to be expanding more into business operations/communications, especially given their previous acquisition of CardMunch. I can definitely see them trying to position themselves as an indispensable communication tool for industry and business professionals.
Earlier quoted context omitted.
It seems like a strategic acquisition. LinkedIn looks poised to be expanding more into business operations/communications, especially given their previous acquisition of CardMunch. I can definitely see them trying to position themselves as an indispensable communication tool for industry and business professionals.
Then they should buy Yammer next.
I just looked at LinkedIn's P/E. It's almost a thousand. How is anyone valuating the company in such a way that could even assume they would increase their revenues 50 times over in the next few years?
As long as you believe LinkedIn can increase their revenue without adding to costs, their current P/E is kind of irrelevant.
This is why investors basically hate consulting companies (since revenue/earnings scale linearly -- in some ways, sub-linearly, since you have to hire more layers of manager), and love products selling zero unit cost products or services directly online.
Something like LinkedIn probably does have very little sales cost related to selling a higher end account, and little marginal cost to actually providing it.
Plus, LinkedIn is a network, so the more users use it, the greater value they each get from using it, and so the higher the revenue per user possible.
Things to watch out for are huge revenue/low earnings when you're near max revenue (so, a product which can only sell to a market of maybe 10000 people worldwide, 9500 of whom already use it, and who are paying a price which is only break-even for you -- adding the extra 1k users won't really get you to good margins), or services, like Groupon, which have huge sales costs to produce incremental dollars of revenue (even if the actual product is basically free to provide).
I don't know what the cash/stock split was, but it's worth mentioning the LinkedIn's IPO raised $352M* so buying SlideShare was just under 34% of all the money they raised. * http://www.bloomberg.com/news/2011-05-18/linkedin-raises-352...
Wow. 3MM raised, 119MM exit. 40x return, and they made that 3MM last 4 years from 2008-2012 with revenue. Congratulations!