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ipo
Rackspace IPO's lesson? Rackspace shouldn't have gone public
One's tempted to praise Rackspace, the San Antonio-based Web-hosting provider, for having the bravery to try an IPO at a time when most tech companies are doing everything they can to avoid the public markets. But with its stock closing the day at $10.01, almost 20 percent below the offering price, Rackspace's IPO was a crashing disappointment. As has the service to its customers. Rackspace once promised "fanatical" customer service. But the company's management seem most fanatical about taking care of themselves. More »
spinoffs
Even eBay wishes PayPal weren't part of eBay now
PayPal's CEO is talking up the company's business handling payments on websites other than eBay. Where have I heard this before? Oh yes: In April 2002, when I had coffee with Peter Thiel, then the CEO of PayPal as an independent concern. He talked up the prospects of growing PayPal's business on other websites. He agreed to sell PayPal to eBay for $1.5 billion that July, and left three months later. And then I heard the story again, and again, and again, as eBay pushed a number of forgettable executives through the revolving door of PayPal's executive suite. More »
10:40 AM on Fri Aug 8 2008
By Owen Thomas
3,148 views,
9 comments
Latest by Owen Thomas: @souhaite: The discussion I had with the former PayPal executive was specifically about their headquarters staff, not customer support. I more »
lise buyer
There were no tech IPOs last quarter and that's a good thing
“I get cranky when talk turns to an IPO ‘drought,” says Lise Buyer, the former Wall Street analyst who took Google public in 2004, in an interview with Private Equity HUB. There were zero tech IPOs last quarter. July 2008 had the fewest IPOs of any July in the past four years. Buyer's not sure all that is such a bad thing.VCs may be frustrated, but they should be happy about having to wait longer. Going public requires a lot of time and focus and energy on things that don’t involve growing a business. And companies that wait longer to go public tend to perform much better once they do. The market is much more finicky, but that means the folks who are planning for an IPO in 2008 have rock-solid finances. The balance sheets are stronger this year than last year because they have to be. Public investors just don’t have the appetite for risk. They’re saying: don’t take these off the grill until they’re well done.More »
lise buyer
Here's a worthy contrarian to pop the bubble in Facebook bears. In 2003, former Wall Street analyst Lise Buyer wrote Google CEO Eric Schmidt and founders Larry Page and Sergey Brin a note reading: “I don’t know if you’ll ever want to go public but I bet that, having been on the other side of the table, I could be helpful to you if so.” Now, four years after Schmidt, Page and Brin said yes and Buyer helped take Google public in 2004, she's got the same message for Facebook. "To be candid," Buyer told Private Equity HUB, "I’d love to work with them." She said why:
More »
Banker who helped take Google public wants to do the same for Facebook
Here's a worthy contrarian to pop the bubble in Facebook bears. In 2003, former Wall Street analyst Lise Buyer wrote Google CEO Eric Schmidt and founders Larry Page and Sergey Brin a note reading: “I don’t know if you’ll ever want to go public but I bet that, having been on the other side of the table, I could be helpful to you if so.” Now, four years after Schmidt, Page and Brin said yes and Buyer helped take Google public in 2004, she's got the same message for Facebook. "To be candid," Buyer told Private Equity HUB, "I’d love to work with them." She said why:
More »
jackpot
LinkedIn employees also allowed to sell some stock
At a recent company meeting, management told LinkedIn employees they would soon be allowed to sell as much as 20 percent of their vested options at a $500 million valuation. Word leaked yesterday that Facebook plans to allow its employees to do the same. Both LinkedIn founder Reid Hoffman and Facebook founder Mark Zuckerberg want to take their companies public — and thereby get their employees paid — but it won't happen soon. LinkedIn expects to earn about $100 million in 2008, but VentureBeat reports that bankers want to see that number hit $200 million before bothering to file papers. The public markets aren't hungry enough for anything less. In July, only 56 companies went public, raising $5.6 billion in their IPOs. During the same month last year, 190 companies raised $31.7 billion on their initial foray into the public markets.
exits
Why Mayfield's Allen Morgan is Web 2.0's biggest flameout
"Investing $5 million in a company that gets bought out for $25 million isn't going to get me into the VC Hall of Fame," Mayfield Fund VC Allen Morgan told Wired in 2006. "That's not why I got into this business." But that is why he's getting out of the business. Morgan was a champion of the Web 2.0 movement, suavely predicting that now-forgotten startups he funded like Pluck and JotSpot would soon go public in splashy IPOs. He bet that the spread of broadband would resuscitate business ideas which failed in the 1990s. More »
bad ideas
Why LinkedIn's getting into the insider-trading business
You'd think LinkedIn management, which has made no secret of its plans to take its automated schmoozefest public, would be trying to avoid trouble with the Securities and Exchange Commission. Not so. They're aggressively marketing the company's latest moneymaking scheme, LinkedIn Research, to hedge fund managers. The premise: Traders can use LinkedIn to find "experts" with "unique input" on public companies in their portfolio. What LinkedIn marketers delicately phrase as "input," SEC investigators might well call "inside information." And the only thing actionable about the whole affair might be the insider-trading charges that result. More »
stocks
Rackspace irons out accounting kinks as it dresses up for IPO
With four different CFOs in only five years, Rackspace has had to take a fine-toothed comb to the books in advance of the server farm's IPO. According to documents filed with regulators, the company disclosed a "material weakness" in its accounting. But if you believe IPO Boutique analyst Scott Sweet, this is all very typical and the deal is still very much in demand. Investors like Sequoia Capital could probably care less whether or not Rackspace cooked the books — once it goes public, they're liquid and Rackspace's spotty uptime, customer dissatisfaction and financial office revolving door is no longer their problem. However Chairman Graham Weston, pictured here, should probably keep that hard hat on just in case. (Photo by Robert Scoble)
clips
LinkedIn founder Reid Hoffman explains his IPO jitters
"We think we could go public on our numbers," LInkedIn founder Reid Hoffman tells Tech Ticker's Sarah Lacy in a video interview (excerpted below). But the company, which just raised $53 million, won't IPO because it would rather reinvest its profits and because the U.S. public markets are too turbulent right now. Hoffman says LinkedIn will use the money in part to buy "good, small tech teams." In the clip, Hoffman says the race with Facebook toward an IPO isn't much of a race. It's more like, "No, you go first," he explains. Hoffman and his handpicked CEO, Dan Nye, shouldn't grow too cautious. Hoffman himself helped PayPal go public during the last downturn, so he knows a strong company can thrive in a poor market. But more importantly, for a professional's social network like LinkedIn, we can't imagine much better free marketing than the nonstop coverage CNBC would give consumer tech's first major IPO in years. More »
ipo
Why Wall Street would be happy to work with Naveen Jain again
Naveen Jain, InfoSpace's sole founder (and don't you forget it), is back in business and angling for another IPO with Bellevue, Wash.-based Intelius. The consumer-information broker's business practices are pretty scammy according to details unearthed by TechCrunch's Michael Arrington — and the unsavory parts of its business are the only ones growing appreciably. But where Arrington goes wrong is in thinking that news of the racket will dissuade investment bankers and traders from doing business with Jain. More »
search
Sergey Brin wants to milk Mother Russia
One place Google is losing the battle for Web search market share is in Russia, the ancestral homeland of Google founder Sergey Brin. The company has developed better Russian word and language processing, but still trails Yandex, which is planning an IPO on an estimated company value of $3 billion. Why doesn't Brin just embrace his inner oligarch and buy Yandex? That seems easier.
ipo
RealNetworks to spin off its games business
RealNetworks' games business grew revenues 33 percent since the first quarter of 2007. CEO Rob Glaser thinks it could grow even faster on its own. RealNetworks announced today it plans to spin off the casual games business and "may precede the spin with an initial public offering and sale of up to 20 percent of the shares," according to a press release. RealNetworks will also buy back $50 million worth of stock.
ipo
Rackspace applies for a $400 million IPO
Managed-hosting service Rackspace has filed with the New York Stock Exchange to raise $400 million in an initial public offering. Investors Norwest Venture Partners, Sequoia Capital and company chairman Graham Weston stand to profit from the exit. Rackspace reported $18 million in 2007 profits on $362 million revenues. We called the IPO in January, but we're not sold on its merits. More »
ipo
Visa drops $18 billion IPO, the largest ever
Shares of San Francisco-based Visa jumped more than 30 percent today in the largest initial public offering in U.S. history. Visa issued 406 million shares at $44 each to raise almost $18 billion. More than half of the IPO take is going to its shareholder banks, which include Citigroup, Bank of America and JPMorgan Chase. Convenient: While the IPO has long been planned, the cash will come in handy right now. (Photo by AP/Richard Drew)
adult friendfinder
Penthouse plans $250 million public offering
Financier and CEO Marc Bell plans to take Penthouse Media Group public in a $250 million IPO. If investors take the bait, it'll likely be on the strength of Adult FriendFinder and the rest of the Web properties Penthouse bought from Andrew Conru last December for $500 million. After the acquisition, Penthouse projected its 2007 revenues would reach $340 million — most of that from Adult FriendFinder. Some of the proceeds from the IPO, if it succeeds, will go to pay off debt from the acquisition.
ipo
Tesla Motors wants another $250 million
Tesla Motors, which finally shipped its first electric car earlier this month, hopes to raise $250 million in equity and debt to fund its mass production push, over the next two years. Chairman Elon Musk wants to conduct an IPO in New York or London, raise money privately and apply for a loan guarantee from the Department of Energy to build a U.S. production plant for Tesla's forthcoming electric sports sedan. Tesla has raised $145 million in venture capital, including a $40 million round that closed last week. Elon, don't spend it all in one place.
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