Tuesday, May 24, 2011

Yandex (YNDX) Prices IPO Above Range at $25, Raising $1.3 Billion

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As expected the flavor of the week, "Russia's Google" Yandex (YNDX) has very strong interest [May 22, 2011: Yandex - Next Week's Hot IPO?]  and is pricing above the top end of the range ($20-$22) expected late last week, at $25 or $1.3 Billion.  This will give the company a market capitalization of about $8 Billion assuming the stock stays at the offering price, which surely it will not.  That said, don't expect a first day performance like LinkedIn (LNKD) because this is a massive initial offering.
  • Yandex is selling 15.4 million shares (pocketing $385 million), while some of its shareholders are selling an aggregate of roughly 36.8 million shares ($920 million). 
On $445M in revenue (2010), the company is being priced at IPO at about 18 trailing sales.  That's extremely rich.  Assuming 60% year over year growth in 2011 (which is probably aggressive) we'd assume a revenue figure of ~$700M in 2011, which would offer 11x forward revenue.  Not cheap but in this market people are willing to pay almost any price for high growth.    Of course these figures are at the $25 IPO price, so we'll see how inflated they get in a few hours.  All that said, compared to a lot of merchandise flying out of China the past 6 months, this is a well established company.

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