Vice Media Is Considering An IPO And Thinks It’s Worth $28.9 Billion Equaling Twitter

Vice Says It’s Weighing IPO Prospects, Considering Buying a TV Network

Never Short of Optimism Anyway, Vice Sees Money ‘Sloshing Around in the System’

Published on March 24, 2014. 0

Vice Media, the company that combines punk culture with online journalism, is poised to double revenue to $1 billion by 2016 and may pursue an initial public offering, co-founder Shane Smith said.

The company, backed by billionaire Rupert Murdoch, expects to reach that mark in 12 to 18 months, with profit margins targeted to widen to 50% of sales from 34% now, Mr. Smith, 44, said in an interview with Bloomberg TV.

With young, sometimes tattooed reporters filing stories from a snake-infested island off Brazil or the civil war in the Central African Republic, Vice Media attracts a male viewer coveted by web and TV advertisers. The growing online, mobile and TV business could have a market value equaling Twitter’s $28.9 billion if Vice Media goes public, Mr. Smith said.

The question is whether investors would agree with that.

“We’d be stupid not to test what the market would bear,” said Mr. Smith, who is CEO. “There’s a lot of money sloshing around in the system, obviously valuations are high.”

Closely held Vice Media, based in New York, supplies news and entertainment online to young audiences. It sells a program to Time Warner’s HBO and produces “The Vice Guide to Everything” for Viacom’s MTV. Reporters file stories that shun conventional journalism rules and often include profanity. In one episode on MTV, they sneak into North Korea as tourists and hang out with a Russian mobster.

Murdoch’s 21st Century Fox acquired about a 5% stake in Vice Media last year, according to Smith. The price was $70 million, Fox said in a regulatory filing, suggesting a valuation of $1.4 billion. The investment came after Mr. Smith and Mr. Murdoch, 83, chatted over drinks at a bar in Brooklyn. Mr. Murdoch’s son, James, sits on the company’s board.

“One of the reasons we did the Fox deal was to stay independent, so we could run the business the way we wanted to run it,” Mr. Smith said. “I vote 95% of the board, so it was a great deal for us. And it’s helping us expand into India, Europe, South America.”

Other investors, with board seats, include MTV founder and former Viacom CEO Tom Freston, the advertising agency WPP and Raine Group, an investment bank, Vice Media said in 2011.

Vice Media started out as a small punk magazine in Montreal in 1994, then moved into video after making its content available online. Its events and programs draw sponsors including Intel Corp., AT&T Inc. and General Electric Co.

The company produces the HBO show “Vice,” which provides reports from areas of conflict around the world. Conventional media outlets struggle to reach the company’s young male audience, Smith said. Vice Media’s main YouTube channel has 4.4 million subscribers while the newer Vice News has 236,597, according to the website.

Vice Media has 35 offices around the world. It’s expected to post revenue of $500 million this year, the Wall Street Journal reported in January, citing a person close to the company. USA Today put 2012 sales at $175 million.

The company is producing so much TV programming worldwide that Mr. Smith said he is considering starting or buying a cable channel. “We are looking at various opportunities because there is such a destratification going on in media right now,” Mr. Smith said. “We can look at buying distressed media assets and then see if we can’t turn them around.”

 

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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