World’s Largest Web Recording Provider Starts Trading on NYSE, IPO Could Value Company Over $ 3 Billion

GoDaddy, the world’s largest website registrar, will debut on the stock exchange on Wednesday with an initial public offering that could value the company at over $ 3 billion. The company’s shares are expected to trade on the New York Stock Exchange under the ticker symbol “GDDY” and will be priced at $ 20 per share, above its previous range of $ 17 to $ 19 per share.

If all 22 million shares offered in the deal are sold at the high end of that range, it could earn $ 440 million for the company and its early investors.

Known for its daring advertising campaigns, GoDaddy manages about a fifth of the internet domains in the world. Based in Scottsdale, Arizona, the company helps individuals and businesses create Internet domains and offers website creation, hosting, security, and other services.

Founder Bob Parsons started the company in 1997 as Jomax Technologies and first sought to go public in 2006. This IPO never took place as the company pulled out due to conditions. unfavorable market conditions.

In December 2011, private equity firms Kohlberg Kravis Roberts & Company, Silver Lake Partners and venture capital firm Technology Crossover Ventures bought GoDaddy for $ 2.25 billion. The company again filed for an IPO last June.

Beyond its early days in the market, GoDaddy has a number of challenges. It hasn’t made a profit since 2009. The company has around 13 million customers and has nearly 60 million domains under its management, according to its S1 filing with the Securities and Exchange Commission. However, GoDaddy lost $ 143.3 million in 2013 on revenue of $ 1.4 billion. The company had $ 1.5 billion in debt as of May 2014, according to the company’s S1 filing.

Rapid Ratings, which measures the financial health of companies by digesting the company’s financial data and determining its financial efficiency, gave GoDaddy a score of 26 on its scale of 0 to 100, a low rating that places the company in a high risk area. “We are seeing general weakness across the board,” said James Gellert, president and CEO of Rapid Ratings International Inc.

Meanwhile, Rapid Ratings is rating the competitors of GoDaddy Endurance International Group Holdings Inc. (NASDAQ: EIGI) and Group, Inc. (NASDAQ: WWWW) and at 26 and 39, respectively.

David Louton, professor of finance at Bryant University, agrees. “While GoDaddy positions itself as the dominant player in this market and it is undeniable that there will be continued growth in demand for some time, I see no evidence of a catalyst that will push demand to the top. -beyond its organic growth trajectory, ”said Louton. noted.

However, GoDaddy has a few advantages. The company’s marketing efforts have made it a household name due to its racy ads featuring NASCAR driver Danica Patrick, who is the spokesperson for the company.

GoDaddy could also see its growth expand into emerging markets such as China and existing markets like Japan. “GoDaddy was launched in India over 2 years ago and it literally swallowed the market share,” said Daniel Negari, CEO of domain registration company XYZ.

About 26% of GoDaddy’s customers are located in international markets, including Canada, India and the UK, the company said in its S1 filing. “The growth opportunities are what make the business so exciting,” said Negari.

The company is this year’s most notable tech IPO since online data storage provider Box Inc. went public in January. Box’s shares were opened above its price range of $ 14 to $ 20.20 per share, and the company’s market cap at the close of trading on Jan. 23 was around 2.8 billion. of dollars. Meanwhile, the joint burger Shake Shack Inc. more than doubled its IPO price of $ 21 and opened at $ 47 a share, valuing the company at nearly $ 2 billion by the end of the year. negotiation on January 30.

Morgan Stanley, JPMorgan Chase and Citigroup lead the GoDaddy IPO underwriting.

Source link