“The company isn’t yet as profitable as it will be in a couple of years. If it was more fully maturing into its opportunity, then the shareholders would expect a higher price and sell more.
“The small size of the offering suggests that the shareholders are big believers — or don’t want to sell at the expected price. That’s positive for the stock but makes it rather mysterious as to why they’d bother floating now, for such a small raise relative to likely valuation.”
Advent has invested in Dailymotion, Qype and EchoVox. Chalfen, a former Apax partner who invested in King.com and QXL.com, tells us Skype’s IPO is not indicative of an up-turn…
“The market remains unforgiving,” Chalfen says. “Intralinks and NXP have had a tough time. Smart has traded sideways. Qliktech has gone well.
“There is no generally positive trend in the market. And Skype is too unusual a data point (large user base, ubiquitous brand, disrupting a trillion dollar industry) to generalise from.”
Chalfen reckons Skype will have to cut costs in the next few quarters, and thinks the current paid-to-free ratio (8.1 million of 124 million users) is small enough to mean a growth opportunity.