Groupon, which offers special deals online, is said to be considering an initial public offering that could value the company at around $25 billion. You can read more about that here. Facebook, the online social networking company, is said to be valued at about $80 billion, based on some recent transactions which you can read about here.
Open Table, the online restaurant reservations company, is already public and has a market capitalization of nearly $2.5 billion. With billions upon billions being thrown around by investors with these companies, it's easy to see why other companies are gearing up to have similar business models, with investors following for what they hope could be a great investment.
Here are five companies that are publicly traded and have by some accounts, a business model or interests in one that has similarities to these high value companies:
InterActiveCorp (IACI) is trading around $31.34. InterActiveCorp operates a number of well known Internet sites and is based in New York. The 50 day moving average is $30.74 and the 200 day moving average is $27.80. IACI is estimated to earn about $1.57 per share in 2011.
Why some investors consider InterActive to be a play on Open Table: "Urban Spoon" is owned by IACI and is competing with the highly valued Open Table which has a market cap similar to that of IACI. Based on the valuation of OPEN alone, IACI looks downright cheap.
The market capitalization of IACI is about $2.79 billion, this is not much more than OPEN which is at about $2.5 billion. However, IACI has about $1.3 billion in cash and minimal debt, so their enterprise value is only about $1.55 billion. IACI could probably unlock a significant amount of value if it were to spin off some of their businesses as separate units. IACI also owns Match.com and the stock looks like an absolute bargain.
Travelzoo, Inc. (NASDAQ:TZOO) shares are trading at $77.21. This stock is at overbought levels. TZOO is a Internet company that offers travel and other deals online. The shares have traded in a range between $11.60 to $84.84 in the past 52 weeks. The 50 day moving average is $54.09 and the 200 day moving average is $36.17. Since the shares are currently trading well over the 50 and 200 day moving averages, and close to the 52 week high, they could be ready to drop lower. Earnings estimates for TZOO are $1.15 per share in 2011, so the PE ratio is about 65.
Why some investors consider Travelzoo to be a play on Groupon.com: Travelzoo offers special deals online that are similar to the Groupon.com offers and business model. Travelzoo.com has had a huge run up and is very richly valued now. Obviously, some of that run up appears to be due to investors putting a "Groupon premium" in these shares. I think these shares are overvalued and due for a major drop.
Quepasa (QPSA) is trading around $5.10. Quepasa operates an online social network and is based in Florida. The 50 day moving average is $7.61 and the 200 day moving average is $7.05. These shares have traded in a range between $3.25 to $15.45 in the last 52 weeks. Earnings estimates for QPSA are for a loss of 31 cents per share in 2011, and a profit of 22 cents for 2012.
Why some investors consider Quepasa to be a play on Facebook.com: Quepasa operates a social network site that has some similarities to Facebook. As the name implies the Quepasa social network primarily appeals to the Latin American community.
Amazon.com, Inc. (NASDAQ:AMZN) shares are trading at $176.97. Amazon is a Internet retailing giant and is based in Washington. The shares have traded in a range between $105.80 to $191.60 in the past 52 weeks. The 50 day moving average is $176.30 and the 200 day moving average is $160.68. Earnings estimates for AMZN are $3.19 per share in 2011, and $4.43 for 2012.
Why some investors consider Amazon.com to be a play on Groupon.com: A few months ago, Amazon.com invested about $175 million in a company called Living Social. This company has a business model and specials offers that are similar to Groupon.com. Livingsocial will certainly benefit from Amazon's existing client base and this could be a solid competitor to Groupon.com.
Local.com (NASDAQ:LOCM) is trading around $3.82. Local.com is an Internet company and is based in Irvine, California. Some investors view LOCM as a potential play on Groupon.com. The 50 day moving average is $3.89 and the 200 day moving average is $4.57. These shares have traded in a range between $3.22 to $8.85 in the last 52 weeks.
Why some investors consider Local.com to be a play on Groupon.com: This company operates a website that offers special deals that is similar to offers made by Groupon.com. It will be interesting to see if it's able to generate enough scale in order to be considered as a viable competitor to Groupon.com. This stock has a large short interest and it could be a short squeeze candidate.
Disclaimer: The data is sourced from Yahoo Finance and Stockcharts.com. The information and data is believed to be accurate, but no guarantees or representations are made. Rougemont is not a registered investment advisor and does not provide specific investment advice. The information contained herein is for informational purposes.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.