The shocking reality of Viadeo’s current market cap

The shocking reality of Viadeo’s current market cap
Uncategorized

9783_viadeo-cherche-une-introduction-a-la-bourse-de-paris-d-ici-2015

After their disappointing IPO earlier this year – stock has dropped from 17€/share to roughly 7.20€/share at the opening bell this morning –  Viadeo’s really been struggling on the Euronext stock market. Competition with LinkedIn has stiffened, and while private investors may be happy to offload Viadeo onto the public market, some simple math suggests that ‘wall street’ doesn’t see much value in this newly public company.

If you assume that the Market Cap of Viadeo is based on the total amount of money raised by private investors, plus the value (or future value) created by the company:

 Market Cap = Sum of Funds Raised + Value Created by the Company
   ~€75 M   = ~ €50M (Ventures)   + ~€25M (IPO) + Value
   ~€75 M   = ~ €75M + Value
    Value   = ~ €0

This week, the market capitalization of the company is ~€75 million; however, taking into account the ~€25 Million that the company raised in its IPO and the ~€50 Million that the company raised from private investors, we see that the market cap of Viado is nothing more than the sum of the money the company has raised to date.

In other words, ‘Wall Street’ thinks Viadeo is worthless.

Viadeo is going to need a serious make-over if it hopes to find a place in the digital economy. One of the biggest issues that ‘local’ professional networks are dealing with is that, as the global economy & Internet-enabled economy spreads to every sector around the world, professionals in key companies in any sector are choosing LinkedIn, largely for its international reach and network effect (it’s already publicly demonstrated its ability to seduce top CEOs and Leaders through its LinkedIn Influencers program). The trick-down effect is that anyone who wants to be those people, or who is N-1 in their company, will also go to LinkedIn. And this carries down through middle management all the way down to interns.

Viadeo is still generating significant revenue today; however, it seems that the revenue generated just doesn’t compensate for the money they’ve spent to date, or Wall Street’s opinion of whether that revenue will grow or srhink in the coming months.

2 Responses

  1. Avatar
    yoann maingon (@yoannmaingon)

    Still don’t understand why Viadeo is limiting features so early in the process of acquiring customers. You almost can’t do anything without paying. So you can’t really create the connections with other users like in Linkedin which in the end is the real value sold to HR depts, and hiring companies. always remind me “1 million is cool… but what about a billion?” let the network grow before selling it’s value.

    • Avatar
      Benoit Senchou

      I totally agree with Yoann. I gave up using Viadeo since you cannot simply have a decent network without having a paid account. Plus also the fact that Linkedin is more international than Viadeo in terms of people you can connect with. No wonder why Wallstreet sees no value in the company.

Leave a Reply

You must be logged in to post a comment.