United Online
(NDAQ:UNTD) shares moved up $1.06, or 7.95%, to $14.40 in early trading
today after the company filed an S-1 with the SEC yesterday indicating
that it would IPO its Classmates.com holdings and raise $125 million.
Many investors are speculating that this IPO would prove to be a boom
for the struggling dial-up internet provider.
Classmates.com is
a social networking website that connections alumni with eachother. The
segment reported revenues of $42.4 million in the quarter ending in
March on a loss of $250,000. And the business is only continuing to
grow with revenues in 2006 topping $139 million. Revenues this year are
expected to come in at around $200 million or more.
Given the
valuations being thrown around by Facebook.com and others in the social
networking space it would not be unreasonable to put a 5x revenues
valuation on the company. Assuming revenues of around $200 million this
year, the company could be worth as much as $1 billion. Obviously this
is great news for United Online shareholders as their entire company is
worth just under $1 billion itself.
Whether or not this IPO sees
a tremendous amount of success remains to be seen; however, given the
strength of the social networking space and the fact that this company
has a leading market position makes UNTD a stock
worth watching!
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