Wayfair IPO Pricing: Hardly Fair?
- According to the Boston Business Journal, Wayfair's IPO is expected to occur any day now at a proposed maximum offering price of $28 per share.
- In my opinion a more reasonable value is between $17.25 and $21.25.
- Wayfair controls neither product manufacturing, nor logistics and distribution so may be less defensible than a vertically integrated e-commerce platform.
- A “Busted IPO” label is generally harmful to a company’s brand.
Will Alibaba Disrupt U.S. E-Commerce? The Man Who Should Know
- To provide more color, I asked Don Davis who is Editor-in-Chief at e-commerce news and research firm Internet Retailer, which publishes the Top 500 Rankings.
- Will Alibaba try to take on Amazon and eBay? The short answer from Don is no because he believes there is tougher competition in the U.S. than China.
- This entire article quotes Mr. Davis who I know personally having been a featured M&A speaker two times at Internet Retailer's annual (world's largest) e-commerce conference.
Why Alibaba Is A Big Deal (Largest IPO In History): Your Cheat Sheet
- Although few retailer investors have heard of the company, the U.S.'s dominance in the e-commerce sector is poised to fall with the air apparent to Amazon set to IPO.
- Amazingly, Alibaba's business is more profitable than Amazon and eBay put together.
- Jack Ma's letter to Alibaba investors may revolutionize the way companies think about their culture and regard shareholders (not first or second, but third priority).
- There are more voices in the press than one can shake a stick at, and this article shows you where to focus.
SaaS Valuation: What Is The Bessemer Venture Partners Index Telling Us To Short?
- 38 publicly traded comparables in the BVP Cloud Computing Index at July 24, 2014.
- EV/Revenue valuations range between 2.0x-28.9x.
- Median of 6.8x (EV/Revenue) and $204.4 million of revenue.
- Mean of 8.0x (EV/Revenue) and $463.1 million of revenue.
Moving The E-Markets: Today's Top Trading Ideas In E-Commerce
- At the end of August, the median e-commerce stock in our Index trades for 16.6x TTM cash flow.
- Standing 987%, 543% and 101% above that level are Zulily, FragranceNet and Groupon.
- Based on my experience as an M&A advisor in the sector, I'm not convinced that these premiums to market are justified or sustainable.
- At the other extreme, eBay, Vistaprint and PetMed Express appear to be undervalued based on the fundamentals.
SaaS M&A: How To Predict Stock Direction AFTER An Announcement
- Average acquisition premium to undisturbed share price is 53.8%.
- Three findings may help you predict stock direction of the acquirer over time.
- The average EV/Revenue multiple for: (i) public targets is 8.0x, (ii) private targets is 5.2x and (iii) sub- $25 million revenue targets is 4.8x.
- Public acquirers may have an opportunity to 'Print money' if they can buy a private at 5.2x and continue to trade at 8.0x.
eBay's 'Uber Of E-Commerce Business' May Be Worth $18 Billion Too
- The recent news that eBay’s local delivery plans are unraveling is misleading.
- In reality, eBay/Shutl is heir apparent to the crown 'Uber of E-Commerce'.
- EBay's enterprise valuation stands at $59 billion (52-week low) and Uber at $18 billion (proposed).
- Perhaps if the market understood Shutl better, eBay's stock would be worth 30% more (e.g. $59 billion plus $18 billion).
E-Commerce Valuation: Offering Guidance For Buyers And Sellers
- Valuation is about judgment, and multiples from a new E-Commerce Valuation Index (contained in this article) provide a framework for making value judgments.
- Multiples based on Enterprise Value (EV) are independent of capital structure, so are of particular interest in stock trading, M&A and transactions of private companies.
- (EV/ EBITDA) is a proxy for free cash flows and to date is the most popular of the EV based multiples (e.g. Amazon's is currently 45.1xs, the median is 18.5xs).
- Based on experience selling e-commerce companies to large Strategics and PE groups in M&A auctions, rates of gross margin expansion (or contraction) may capture future prospects, better than EBITDA.
- I propose that (EV/ Growth-Adjusted Gross Profit) be adopted as the new standard of relative value for e-commerce companies, and have developed a proprietary formula.
- Shareholders Are Disrobing Talbots
- Facebook's Busted IPO: Double Back-Flip Not Face-Plant
- 3 Signals Amazon's Gross Margin May Keep Surprising On The Upside
- Watching The Tax And Debt Clocks: Long-term Capital Gains Rate Set To Skyrocket 66.7%
- Amazon's Billion-Dollar Payday Nearing Thanks To Marketplace Fairness Act
- The 'Cyber Monday Bump' And The 20% Dump
- Capital Gains Tax Spike: A Quick Way To Lose 13% ... Wait Until The Ball Drops In 2012
- 'Make Amazon Shareholders Money' Act: 10 Senators, Wal-Mart, Others Duped Into Support
- Abrupt End To Tax-Free Internet Shopping Predicted: Significant Impact On Valuations
- Cyber Monday Deals May Tank Valuations Of Web-Only Retailers
- Amazon.com For $33.50 A Share?
- Amazon's On Steroids, Only Worth $52 A Share
- PetMed Express Trading At 45% Discount To Peers Following Earnings
- Valuations Of Web-Only Retailers Could Drop 25%