EBay to Spin Off Skype Via IPO

After much speculation, eBay (EBAY) finally gave us an answer: Skype will be spun-off as an IPO (planned for the first half of 2010).

Even though the company has continued to grow at a torrid rate – and is a disruptive force in the global telecom space – the fact remains that it has little synergy with the mother ship. But, with an IPO, eBay can “have its cake and eat it too.” Basically, an IPO will raise a slug of cash and, in turn, there will likely be a huge chunk of equity left over.

Of course, the IPO market can be extremely fickle. Although, there are glimmers of optimism, especially in light of the successful ChangYou (CYOU) offering.

In other words, there is an appetite for hyper-growth plays – and Skype fits the bill. Besides, the company has a massive global footprint, especially in China. In fact, Skype is the biggest provider of international calls. Thus, there’s a good chance that foreign investors will buy up shares.

So long as Skype can keep up its growth ramp – which seems reasonable – the valuation could be rich, say $2 billion to $3 billion or more.

Either way, the IPO filing is good news for Goldman Sachs (GS), which has been retained as the lead underwriter.

Comments

[shootpar2001]

Simple question.
Does Skype make money?
If not; it is the 90'e redux.....and skype does rhyme with hype!!!!

2009 Apr 16 10:50 AM

[sunnsea]

Skype which has allowed communication internationally to millions will be forced to charge for services to pay off the IPO investors. Farewell, Skype!
Another great internet idea succumbs to corporate madness from E-Bay and Goldman.

2009 Apr 16 12:55 PM