Mixi IPO
Reports are coming in from Fukumimi and Kenji Mori that Mixi plans on going public in September. Its estimated that the IPO will value the company at $1B compared to MySpace $500M+ Is this price absurd?
MySpace had it gone public would have been worth atleast +1B dollars. We have to remember there is a big difference between public and private valuations. This is why turn around companies can make money buying private companies and taking them public within a matter of months. So Mixi being valued more than MySpace at IPO doesn’t suprise me. In April I estimated that Mixi was worth atleast $150M as a private company had it been aquired by Yahoo! or someone of the likes as a public company I would have valued it closer to $600-800M.
The IPO means that Mixi can expand outside of the social networking business. We should also take note, Mixi is the first social networking company to IPO and this will be a great opportunity to study their financials closely to figure out how they make money and how they plan on making money going forward. My assumption is that they made most of their money from advertising. I agree with Fukumimi that they could have also done very well partnering with Google in a Myspace - Google type advertising deal and stayed private. Good luck guys.
August 16th, 2006 at 1:42 am
I’m very much interested in the next step they would take when they get so much money through this IPO. They have made a comment saying that they would use the money for enhancement of their servers and relocating their office… For sure, they will get more money than that. Maybe they will invest more on music service they launched recently???
Anyway, their profitability (26%) is amazing, even though more revenue comes from the recruiting business..
August 16th, 2006 at 3:55 am
Going public will not rule out a Google type deal, of course. I don’t think they are getting as much as they could from search, or their relationship with Goo (NTT Resonant). They could go it alone, but I’m sceptical as to why they should bother.
Nikkei is saying that they expect the float price to value the company above the JPY100B mark, which would suggest a price of around JPY1.5M/share. Hype will push the actual share price to double or triple that figure in the first days and weeks.
Having said that, I’m not sure how sustainable their long term growth is, most Japanese heavy internet users are already on Mixi (whether they use it that often is another matter) and it remains to be seen how they can leverage their market share and translate that to businesses beyond CPM advertising.
August 16th, 2006 at 3:15 pm
I don’t know much about the Japanese market but I think Mixi pricing itself so high seems almost like a Vonage situation waiting to happen. I don’t see Mixi shares increasing dramaticly in value after its IPO. I want to believe that a month after the IPO the company will still be valued at less then JPY2.5M/share. In my opinion it should remain flat. Again this is America and the Japanese market is different. We will see.
August 16th, 2006 at 7:59 pm
Hey, I’m interested in checking out how mixi actually works. Would anyone mind sending me an invitation… ? ãŠé¡˜ã„ã—ã¾ã™ã€‚ My e-mail is: teriyakijack@yahoo.co.jp
If you can I would be much obliged.
August 17th, 2006 at 12:02 am
Thanks Ejovi, very much appreciated.
October 10th, 2007 at 10:43 am
Glad to see someone is staying on top of things.