New York — Internet telephony giant Skype SA on Monday announced plans to raise US$100 million through an initial public offering (IPO) in the U.S., filed an S-1 statement with the Securities and Exchange Commission, as the Luxembourg -based provider of Internet telephony, video calling and instant messaging communications seeks to diversify and boost its user base and revenue.
Skype said that most of its income currently comes from fees its levies for its SkypeOut service, which it also wants to see grow and which lets users make calls outside of the Skype domain to regular phone lines and mobile devices. Skype, said it is hoping that its global name recognition and rapid growth will outweigh concerns that few of its customers actually pay.
A man uses a Skype internet phone next to a laptop in Taipei, November 11, 2005. (Credit: Reuters/Richard Chung/Files)
Skype is one of the latest in a line-up of portfolio companies that private equity investors are pursuing to take public. Last week, private equity-backed Dutch chipmaker NXP Semiconductors NV went public but raised 28 percent less than planned.
Analysts expressed that the filing could be an attempt by Skype’s private equity owners to recoup some of the $2 billion they paid for control of the company in November 2009, or an effort to lure other technology or telecom companies into a deal.
After the IPO, Skype will begin dealing on the Nasdaq Global Market. Goldman Sachs, J. P. Morgan, and Morgan Stanley are among the financial institutions handling the IPO. Neither a price range nor a date for the IPO have yet been set.
Skype, which provides a software-based communications service that empowers users to have online free voice and video calls via the Internet to other Skype users utilizing virtually on any Internet-connected device, however it did not disclosed when its shares would be floated or at what price.
Furthermore to Internet telephony, video calling and IM, Skype also provides SMS, screen sharing and file transfer services.
Skype acknowledged this in its risk section of the S-1 filing:
“We have historically derived a substantial portion of our net revenues from a single product–SkypeOut. For the pro forma year ended December 31, 2009 and for the six months ended June 30, 2010, 86 percent and 87 percent of our pro forma net revenues and net revenues, respectively, were derived from the use of SkypeOut. Due to this dependence on SkypeOut as our primary source of net revenues, we are subject to an elevated risk of reduced demand for our SkypeOut product.”
Skype, founded in 2003, was acquired by eBay in 2005 for $2.6 billion. In November last year, online auction giant eBay disposed of a majority stake at Skype for some two billion dollars to a group of investors that included the two founders of the company. The deal valued Skype at 2.75 billion dollars.
Now, around a year later, Skype’s promoters are placing it up for an IPO. The filing did not defined which shareholders would sell in the IPO or how many new shares would be sold.
The potential for a Skype public offering has been swirling about for a long time. Since separating from eBay, Skype has seen its business blossom.
According to its registration records, Skype had generated 406 million dollars of net revenues in the first half of 2010 and counted 560 million registered users.