In 2006, web hosting company GoDaddy.com decided it was time to file for an initial public offering (IPO). However, it quickly changed its mind after learning that it would have to take a 50 percent haircut (a loss on the market-value of a stock to provide a cushion for the brokerage company in case the investment loses money) on its initial public offering.
Since then, GoDaddy has experienced a plethora of financial issues, eventually culminating in a business-saving, $2.25 billion investment from three different private equity firms in 2011 - KKR & Co. (KKR), Silver Lake Partners and Technology Crossover Ventures. Collectively, these three companies now own 69 percent of GoDaddy, with founder Bob Parsons owning 28 percent himself.
Unfortunately, these investments have not led GoDaddy out of financial straits. Despite posting a 24 percent increase in revenue from last year, GoDaddy still lost $200 million last year. Surprisingly, this number represents a vast improvement from 2012, where GoDaddy lost $279 million. Through the first quarter of this year, GoDaddy has posted $51 million in losses.
GoDaddy filed its S-1 with the SEC for a planned IPO. Important information here. http://t.co/nE4Tu8BT1s
— GoDaddy (@GoDaddy) June 9, 2014
It is due to these extreme losses on a yearly basis that GoDaddy has finally decided to file for its IPO. With this offering, GoDaddy hopes to raise approximately $100 million, with all of the proceeds going toward repayments of its debts. However, this number is very likely to change once the company actually hits the market.
Fortunately for GoDaddy and its future investors, the non-financial numbers have been trending up for the company for quite some time. GoDaddy has reported an increasing customer base of 13 percent over the last few years, with its total number of customers reaching 11.6 million in 2013.
Quick skim of Godaddy S1 fails to mention shooting elephants as one of the risks http://t.co/W1NqqOhkfX
— kellan (@kellan) June 10, 2014
GoDaddy also has precedence on its side. Twitter was successful with its IPO foray late last year, and GoDaddy competitor Endurance International Group Holdings Inc. (EIGI) has posted a 14 percent growth in shares since its company went public last year.
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