![]() In our opinion, the fund raise not just allayed concerns over the adequacy of capital at Vimeo, but also offered a deep market perspective to IAC’s management that Vimeo was capable of surviving as a stand-alone unit. Given the robust investor interest, IAC was able to raise capital for Vimeo at substantially higher valuations compared to IAC. Vimeo - Total Revenue and Subscribers (YOY Growth) Spin-Off Research Although management acknowledged that 3Q20 positive adjusted EBITDA was more a result of lower product development and marketing costs, we reckon that Vimeo will continue to improve its profitability going forward. The recurring SaaS subscription revenue model and recent trends of growth in bookings outpacing that of revenues, offer solid revenue visibility to Vimeo. Prior to the pandemic, the momentum in Vimeo’s organic bookings growth (1Q19: +11%, 4Q19: +27%) reflected expansion of customer base to include even small businesses. ![]() During the COVID 19 pandemic Vimeo’s subscriber and top-line growth skyrocketed amidst accelerated demand for its video creation, editing and storage software as well as for its live streaming platform. In the recent past, Vimeo has been able to generate robust revenue growth, improve profitability and raise capital, thereby paving the way for a potential spin-off, in our view. ![]() We believe that management wanted Vimeo to either improve its performance or have enough capital for sustainable growth investments as a stand-alone entity. In the past, any consideration of Vimeo’s spin-off was hampered by concerns over scale and profitability, especially since it was a money-losing unit. The acquisitions of Livestream (live category), Magisto (creation) and VHX (Over-the-top) expanded Vimeo’s offerings and scale. In 2006, IAC acquired Vimeo as part of a deal to purchase comedy website CollegeHumor. Later, on July 1, 2020, IAC completed the spinoff of Match Group from the remaining businesses of IAC.Īs part of its strategy, IAC acquires small online companies and grows them through a series of acquisitions, followed by their spin-off. At the IPO price of $12.00 per share, Match Group raised net proceeds of $460 million, which was used to repay indebtedness it owed to IAC. Match Group offered 38.3 million shares in the IPO. No cash balance or cash flow is included in the calculation.IAC/InterActiveCorp Key Data Spin-Off ResearchĮarlier, on November 19, 2015, IAC completed the initial public offering of Match Group, Inc, creating the 8th public company. Please note all regulatory considerations regarding the presentation of fees must be taken into account. Backtested results are adjusted to reflect the reinvestment of dividends and other income and, except where otherwise indicated, are presented gross-of fees and do not include the effect of backtested transaction costs, management fees, performance fees or expenses, if applicable. Actual performance may differ significantly from backtested performance. ![]() Further, backtesting allows the security selection methodology to be adjusted until past returns are maximized. Since trades have not actually been executed, results may have under- or over-compensated for the impact, if any, of certain market factors, such as lack of liquidity, and may not reflect the impact that certain economic or market factors may have had on the decision-making process. Specifically, backtested results do not reflect actual trading or the effect of material economic and market factors on the decision-making process. Backtested performance is developed with the benefit of hindsight and has inherent limitations. This information is provided for illustrative purposes only. No representations and warranties are made as to the reasonableness of the assumptions. Certain assumptions have been made for modeling purposes and are unlikely to be realized. Changes in these assumptions may have a material impact on the backtested returns presented. General assumptions include: XYZ firm would have been able to purchase the securities recommended by the model and the markets were sufficiently liquid to permit all trading. Backtested results are calculated by the retroactive application of a model constructed on the basis of historical data and based on assumptions integral to the model which may or may not be testable and are subject to losses. The results reflect performance of a strategy not historically offered to investors and does not represent returns that any investor actually attained. Backtested performance is not an indicator of future actual results. Disclaimer: The TipRanks Smart Score performance is based on backtested results.
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