[{"_1":2,"_30":-5,"_31":-5},"loaderData",{"_3":4},"routes/__layout/tag.$name",{"_5":6,"_7":8},"tagName","private equity","posts",[9],{"_10":11,"_12":13,"_14":15,"_16":17,"_18":19,"_20":21,"_22":23,"_24":25,"_26":27,"_28":29},"id",85,"title","BubbleWatch Alert: #003","excerpt","Private equity just paid $1.5B for NexTag at roughly 19x earnings, higher than recent acquisitions of aQuantive (14x) and DoubleClick (10x). The bubble is inflating nicely. If we hit 24x earnings by September, I'm launching GigaSeldo.","body","\r\n\r\n

Private equity investors have paid a little over $1 billion for (two-thirds of) NexTag, another warmed-over relic from the last boom, founded in 1999 and then reinvented after its original model failed spectacularly.\r\n\r\n

According to that GigaOm article above, NexTag have \"revenues of $200m\" (per month? per quarter? per year?). Nielsen//NetRatings, who publish monthly reports on advertisers, say they are spending $60m a month on advertising. They themselves claim to have been profitable every month since October, 2001 -- a pretty unlikely month to have a turnaround, given that the rest of the market was melted at that point, and in 2003 they were boasting about 450% growth that year.\r\n\r\n

So say Om's figure is quarterly (and I have no idea if it is, but that's the period for which these figures make the most sense). Then they're spending maybe $180m every quarter to make profits of, again very roughly, $20m. So at an unusably poor level of certainty, that's $80m in profits a year, which given their $1.5 billion pricetag gives them a valuation of something like 19x earnings -- compared to 14x earnings for aQuantive about two months ago and 10x earnings for DoubleClick a little over a month before that.\r\n\r\n

That's some bubble we've got going there. If there's an acquisition for something like 24x earnings in early September I am going to proclaim myself a guru and start GigaSeldo.\r\n\r\n

P.S. It's developer day tomorrow! Woo!","updated",["D",1181175498000],"created",["D",1181175498000],"codename","bubblewatch_alert_003","legacy_id","3633","published",["D",1181175498000],"draft",false,"actionData","errors"]

Posts tagged “private equity”