GrubHub Goes Public

GrubHub goes public today 4/4/14. They priced 7.4 million shares at $26 per share. That would put their market capitalization around $2 Billion.

Ticker symbol will be GRUB on the New York Stock Exchange (NYSE:GRUB).

Grubhub is Profitable

grubhub

5 Easy Steps to Create Your Own Billion Dollar Company

Now you may think this is a joke and you may giggle after reading the incredibly easy 5 steps. However after you read the steps be sure to look at the case study of how one company followed the steps, loses money, and is now worth $6 Billion.

5 Easy Steps

  • 1. Create a Product or Service that people want (hereinafter “Stuff“)
  • 2. Give Stuff away for Free
  • 3. Keep track of how many people accept your Free Stuff
  • 4. Make money, lose money, it doesn’t matter
  • 5. Go Public


Case Study : Pandora

I know what you are thinking. That’s crazy and could not possibly work, right? Wrong. Case in point Pandora. Pandora is listed on the NYSE:P and loses money. However it is worth $6 Billion. Here is how they followed the above 5 steps.

  • 1. Pandora is a “…personalized internet radio.” aka cool Stuff (from Pandora’s site here)
  • 2. “Pandora is free personalized internet radio.” note it is Free (from Pandora’s site here)
  • 3. Pandora releases audience metrics every month (here are the March 2014 metrics)
  • 4. Pandora is not profitable, they lose money, some choose to make money and some choose to lose money in my 5 easy steps but in this case they said “we’re cool with a $6 Billion valuation, let’s just lose money”
  • 5. They are public under NYSE:P


Do These 5 Easy Steps Work in Every Industry?

Unfortunately no. Let’s look at three examples.

Example 1: Beverage Industry. You could create a new soft drink and give it away for free. Like Pandora you could put advertising on your drinks. If it is delicious and people drink your free drinks daily then you are worth billions, right? Wrong, it does not work in the beverage industry.

Example 2: Housing Industry. You could build homes and give them away for free. Like Pandora you could tell the new home owners that there will be one box next to their house that only you can put advertisements in, in exchange for the free house. If they are nice homes then people will accept them and you are worth billions, right? Wrong, it does not work in the housing industry.

Example 3: Car Industry. Make cars and give them away for free. You have the home addresses of the new car owners so you can send them advertisements. If they are nice cars then people will accept them and you are worth billions, right? Wrong, it does not work in the car industry.


What is the Takeaway From This?

Be a Billion Dollar Company in 5 StepsIf you give away stuff for free and no one wants it, then you are worthless. But public markets reward those that give away stuff for free and is accepted by a lot of people as long as it is an internet based company, or at least has “technology”.

So follow those 5 steps, I have a feeling we will see multiple IPOs this year of companies following these 5 easy steps. I myself would like to give it a try.

IPO for Rubicon Project

The Rubicon Project company has been around for quite a while. We wrote about how to use their platform on your own site and setup networks within Rubicon Project to earn revenue and maximize your websites ad space, and other items of note about Rubicon. In our opinion they provide an impressive platform.

Now Rubicon Project is Public
rubicon goes publicThe ticker symbol is RUBI on the New York Stock Exchange (NYSE:RUBI). As of the writing of this article the market has closed for the first day of Rubicon trading. Trading started at $17.12 and ended just over $20 having hit a high of $21.20. I read that they raised about $90 million in this public offering. They provide an automated advertising platform to match buyers and sellers and decrease the associated costs.

Yahoo Finance IPO List

Sometimes old school text without all the flashy graphics, videos and other distractions, is just what we need. When you want to follow the IPO market Finance Yahoo IPO page is just what you need. Take a look at the simplicity of the page:

ipo page on yahoo

You can quickly and easily see the latest companies to go public and their opening price. Filings are also shown so you know which companies are about to go public and the withdrawals as well. Everything you may want is hyperlinked to dig deeper into each stock and information about them. Notice the options on the left hand menu, for example you can view the best post-IPO performance for the last 3 months, here is what you would see:

3 Month IPOs

The Yahoo IPO page is great for following the latest IPOs.

2U Goes Public Today Friday the 28th

2U, Inc. trading on the Nasdaq with ticker TWOU went public today. The IPO share price was $13 and the company sold 8 million shares. Stockholders sold 1.2 million shares for a total of 9.2 million shares being offered. According to the Street the company and some selling stockholders also included a 30-day option for underwriters to buy up to an additional 1.4 million shares.

About 2U
2U, according to their site, was “Founded in 2008 by a team of education and technology veterans, 2U partners with top tier colleges and universities to create the world’s best online programs. Our cloud-based software-as-a-service platform allows our partners to educate and engage students globally. 2U’s dynamic course content, blended experiences and live face-to-face classes offer students around the world the chance to achieve their highest potential.”

Financials
In 2013 2U had a loss of $28.3 million on revenue of $83.1 million.

CEO Makes $5 Million
2u-publicThe CEO, according to Seeking Alpha, is paid $5 Million. That seems quite high for a company doing less than $90 Million in revenue, is not profitable, and lost almost $30 million on that revenue. A company that was founded in 2008 and just went public may want to consider conserving some cash, and I would think the CEO would want that as well assuming they have the companies best interests at heart.