The company is actually worth ~57% more than Sohu with 1/9th the revenue, but rounding made for a better title. Know what company I’m thinking of?
Here’s a few more hints:
- It’s currently trading at about 60x annualized 2011 sales (4x as rich as Linkedin’s valuation)
- Has about 1/10th as many employees as Sohu
- Claims to be engaged in significant research & development, but only spends 8.2% of revenue on R&D while Sohu spends 12.6%
The winner is online video provider Yokou (YOKU), the most over-valued company I’ve looked at in memory. Anyone who can explain the valuation here, please do so in the comments, because I am at a complete loss. Sure, Yoku is a younger company with higher growth rates, but methinks investors, er “investors” are projecting triple-digit growth will increase far longer than it is likely to, and assigning a significantly lower discount rate than they should be to account for Chinese company opacity, audit, control, and legal risk.
While the stock is down significantly over the past month and a half, prudent investors should be skeptical of any firm that does a secondary offering 6 months after its IPO when the stock is up ~100%.
Expect more on YOKU in the days and weeks to come!