Business Model of comScore Inc.
- Business model of comScore Inc.
- Market potential for comScore's products
- Barriers to entry
- Principal and selling shareholders
- IPO's and comparable stocks
- How to price comScore
- Key financial metrics
? Providing information to clients that will help them to make more intelligent business decisions
? Offering consumer behavioral information that can be strategically used to improve business effectiveness
? Offering detailed and intimate information on consumers that allows clients to make better-informed strategic decisions
[...] data come in many different formats, and may require a very expensive storage facility o The data must be filtered and normalized There are other companies in existence whose business functions are very similar to that of comScore o Thus, they may be swallowed up by a larger company o They may be put out of business by their competitors o Their method of analysis may not be as efficient and as the bench mark of a company that has been public for a while Key Operating Issues ComScore utilizes the behavior of 2 million internet users by logging every one of their actions while they are surfing the internet o Each of the users has granted permission for tracking them on a per click basis Operations solely depend on the third parties o These are companies that have gathered information on these 2 million internet users and are providing it for a fee to comScore Without the existence of these third parties, comScore would not be in business because they do not own their own proprietary database of data on behavior and internet usage Technology / IP ComScore has built the technology in order to be able to store millions of entries of clicks o A very strong and robust network must be built with servers and good back-up systems to support the logging of information There is a great necessity to be able to capture, store, sort, and search through information o The databases are extremely powerful and provide the tools to make information out of the raw data Management Management has had in-depth and industry experience A large portion of the management has higher degrees They have had experience working on boards of similar companies Some of the management are very R & D oriented and are scientific o Other management personnel have experience running and being part of small to large companies and managing people There is an intersection between the above two, and these people have both the technical expertise and the management experience This type of management for this type of company would be ideal A select few of the management team do not have the comparable credentials that others do; however, it is possible that their personality complements the work culture Principal and Selling Shareholders Five percent of the stockholders are institutional investors such as: o Accel partners o Lehman Brothers o Adams Street Partners The directors and named officers have a rather large stake in the company as well While the institutional investors have about 14 million shares, the directors have about 12 million shares Some of the additional stockholders include o Flatiron Partners o Peter Daboll o VSpring SBIC Key Financial Metrics 5 million shares of common stock will be sold The price will be about $14 - $16 per share The ticker symbol will be SCOR Underwriters have an option to purchase 750 thousand additional shares Key Characteristics in helping/hindering to sell Because the starting out price will not be a penny price, this may set investors minds into thinking that this company is worth more than a penny stock The company will not have a cheap image Because the price seems like it should be a little less, given the fact that it is relatively small, and that there is lots of competition the price of the stock may drop quickly the first day o If the price drops quickly the first day, then the financial intermediaries will experience a loss, as they may have a stake in the company o Investor confidence will immediately plummet Given that psychology is not an exact science, some investors may perceive this initial pricing to be a bit low o The price may jump, and the stock will have very large gains Some investors may be mistrustful and may perceive this to be an inflated bubble If this is the case they may sell the stock after the first day o Investor confidence will go up and may set a very positive stage in the market for the company IPO's and Comparable Stocks Some of the competition of comScore includes: o Aquantive Offers digital marketing services to help clients make the most of their online ad budgets. [...]
[...] Its HBX sensors, which are inserted into Web pages, collect data used to improve marketing, e-commerce, and customer support 278 employees, with almost 30% company growth in 2006 How to Price comScore A preliminary prospectus will take place o This is the red herring o It is distributed to brokers and prospective buyers If there is a large interest to buy these shares, this will have a positive impact on the issuing price of the stock The firm pricing the stock must know the company's position in the market o If it is very competitive and has a competitive advantage over other companies and has a strong management team, it may be a good idea to price it higher o However, if the prospectus is not looking very marketable, it may be a good idea to low ball This way more investors will be attracted due to the lower price A very small change in the price may have very drastic short term, and possible long term effects on the price of the stock The road show takes place after the preliminary prospectus o Management team will explain their market position and how the company will execute its plan o The quality of the plan and the management team will be shown off Several factors will determine the price at which the stock is offered o Financial performance o the company It is reasonable to say that if the company is doing well, it will be possible to raise the price a bit o Stock market conditions If the market is saturated with buyers, it may be [...]