Maximizing the price and valuation of your IPO or Initial Public Offering. Shows how underwriters out a value on companies that are going to go public or do reverse mergers. Also useful to those seeking venture capital.

1. www.TheSecuritiesAttorneys.com
IPO -
Maximize Your
Offering Price

2. Disclaimer

This is not legal or
investment advice of any
kind

Seek competent advice
from qualified attorneys
and investment bankers

Your situation may vary

The more you know about
finance and business, the
more you can profit

3. www.TheSecuritiesAttorneys.com

This will show you
how IPOs are valued

Knowing how Wall
Street underwriters
look at IPO pricing is
key to positioning
your company to
maximize valuation
and minimize
dilution

4. There is nothing
Wall Street
loves more than
growth.

5. I am going to
reveal here an
evaluation of
some initial
public offerings
we prepared on
November 27,
2011.

6. This is a preliminary analysis of
these IPOs, completed and
planned, that we prepared for a
client company that was
considering going public.

7. www.TheSecuritiesAttorneys.com
When you attack the market with
these kinds of quantitative tools,
you find that the mystery falls
away and you can see clearly

8. www.TheSecuritiesAttorneys.com
Your underwriter will prepare
studies like this to show at what
valuation he can use to market
your stock in your IPO

9. November 2011
Company Valuation
(millions)
Forward
P/E
Price/Sales Uniques
(millions)
Angie's List 413 N/A 5.4 1
(all paid)
Friend-
finder
40 1.19 0.12 484
Groupon 16,700 187 12.24 183
Linkedin 6,940 248 6.56 135
Pandora 2,080 N/A 9.72 90
Zynga 15,000 152

10. Company Revenues
(millions)
Revenue
Growth %
Value per
User
Revenue per
User
Angie's List 78.7 48 413
(all paid)
8.7
(all paid)
Friend-
finder
338 -5 0.08 0.7
Groupon 1,118 (nine
months)
699 116.78 7.82
Linkedin 354
(nine months)
120 51.41 2.62
Pandora 103 23.11 2.26

11. It is important to
note the metrics
we used. We
used revenues,
revenue per user
and revenue
growth.

12. These metrics
were mentioned
in public
discussions about
these companies.

13. Now here is a
discussion of
each company

14. As you can see, they
all have their own
unique
characteristics that
have to be taken
into consideration
in evaluating the
whole group.

15. Angie's List is
unique in that all of
its members pay.
The service is to
provide customer
written reviews of
local services.

16. All of their
subscribers pay
cash money, so
the revenue per
user is high and
the value per user
also is high.

17. Friendfinder is an
online dating
service. Their IPO
crashed and they
are being sued. We
can discount their
numbers as an
outlier in the data.

18. Note the low
value per user,
low revenue per
user and lack of
growth

19. Groupon had
shown the most
growth of any
of the list

20. If you look at the
value per user
column, and
compare it with
the rest, you can
see the premium
the market put on
growth.

21. Linkedin, with
less growth than
Groupon, was
being valued
well

22. Investors
perceived that
Linkedin's users
are locked in,
unlike Groupon

23. Note that Zynga
has a strong
value per user

24. This is interesting
as there were
doubts about its
ability to keep
momentum a
fad business

25. Summing it all
up, what can we
learn here?

26. To me, revenue
growth jumps out
as a key driver of
growth.

27. Groupon, LinkedIn
and Zynga all had
strong revenue
growth coupled
with strong
revenue per user

28. The more you look
at this, the more
you understand
that growth drove
their value

29. We know now that
Groupon and
Zynga failed to
continue their
growth, and as a
result, their
stocks crashed

30. From this chart,
we can deduce
several things

31. First, while the
market valued
revenues, it
discounted profits
almost entirely

32. To me, revenue
growth jumps out
as a key driver of
growth

33. Growth of
revenues is the
key metric

34. Therefore, you
should focus on
growth, customer
lock in and
having a unique
service

35. This is only a
beginning –
We can show you
how to maximize
the value of your
stock offering

36. This will increase
the amount you
raise and
minimize the
cost of dilution
in your IPO

37. www.TheSecuritiesAttorneys.com

Questions –
email me at
John.Lux@
Securities-
Law.info

(240) 200-4529

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