Internet telephony company Skype today announced plans to IPO, the details of which are included in this registration statement. As an online investor relations company, AGORACOM is extremely bullish on the long-term prospects of great online technology (including our own). I’m personally a user, big fan and plan to incorporate Skype into AGORACOM over the next 6 months. If you are a small-cap company, you should be using Skype to both save costs and better connect with shareholders – but we’ll save that conversation for another day.
SHOULD I BUY SKYPE STOCK?
For now, the most important question I need answered is – should I buy Skype if and when it goes public? The answer is yes and it comes from two sources of information:
1. THE DATA
As you can imagine, there is a ton of good data floating around on Skype’s business so here are a few tidbits (hat tip to Techcrunch):
- Revenues for the first six months of 2010 were $406 million, with a net income of only $13 million.
- However, a big portion of that was interest income. Income from operations was only $1.4 million for the six months.
- Gross margins are a healthy 51% and expanding thanks to scale and the ability to negotiate lower telephone fees around the world.
- The company currently has $85 million in cash.
- Skype users made 95 billion minutes of voice and video calls during the first half of 2010.
- Skype users sent 84 million SMS text messages during the period.
- Skype is averaging 124 million users a month, with only 8.1 million of those paying users.
- The paying users pay an average of $96 a year.
- Skype growth is going to come from: More paying customers; More enterprise customers; and Advertising
2. THE EXPERTS
All of the data above is great but it still doesn’t tell me is Skype should be a buy. Are their growth objectives realistic? What is the competitive landscape like? Will they be the leader 5 years from now or will Skype get “Yahooed”? Truth is that nobody has a crystal ball but if there is one guy I trust to summarize the big picture, it’s AGORACOM Keynote Speaker and leading global financial blogger – Paul Kedrosky. His commentary below was the icing on the cake for me, all I have to do now is wait for the IPO.
Regards,
George