Investment Banking Analysis

In: Business and Management

Submitted By wangzhuo
Words 272
Pages 2
Following are several snippets from a recent news story about the hottest IPO of 2012,
MySocialMedia.com.
...based on a forecast for earnings before interest, taxes, depreciation and amortization of $104 million in 2013.
The shares, which traded as high as 31 times annual sales...Reducing its multiple from 22 times annual sales now to that level by 2014 would require...
To bring its price-sales ratio in line with the Dow Jones Internet Services Index multiple of 3.7...
More than 30 million shares changed hands the first day of trading, 3.8 times the amount sold to the public...About 85.7 million shares owned by insiders and money managers start to become eligible for trading 180 days after the IPO.
...is probably able to convert about 15 percent of its sales into EBITDA, and may generate $680 million in revenue next year...
While it trades for a higher price-to-sales ratio than its peers, it’s also growing faster.
MySocialMedia’s valuation of 22 times sales compares with an average of 9.2 times estimated 2012 revenue at Web business software companies...
...a comeback in venture-capital IPOs propelled MySocialMedia.com to a high of
$122 in its first day of trading from an initial price of $45. With a market value of
$8.4 billion, the company must boost revenue to bring its price-sales ratio in line with the
Dow Jones Internet Services Index by 2014...
As an equity analyst, using the materials covered in MSF 535 and the news clippings presented above, provide a maximum of a three page analysis of MySocialMedia.com for your…...

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