Skype's free video call service is used around the world. Image: Flickr/Steven Parker
Just one year after spinning off from Ebay, Skype has filed the initial paperwork with the SEC for an initial public offering. The Skype IPO has been long expected, though some surprising numbers were revealed in the filings. After the IPO, the ownership structure of Skype will be complicated — though users are hoping that Skype will keep the free services it has become popular for.
Financial health of the Skype IPO
The Skype IPO is proposed at a value of about $100 million. The Skype SEC filings revealed revenue and income that worries some analysts. The revenue of the company for the last six months is about $406 million. The net income of the company, though, was only $13 million. With a 3 percent net margin, the company isn’t exactly growing quickly. Only about 9 percent of Skype users actually pay for the service, though they average $96 per year.
Skype’s new ownership structure
Once the Skype IPO is completed, the ownership structure will be relatively complicated. The company is based in Luxemborg, though it is offering American shares. Private investors and employees are both going to be considered owners of the company as well. These three owners will be over Skype S.A., which will issue the stocks. These stocks will be a part of Skype Global Holdco and Skype Global. These holding companies will be split into Skype, Inc. and Springboard Finance, L.L.C. Springboard Finance, L.L.C., will own 13 operating subsidiaries, including Skype Limited, Skype Sweden and Skype Software.
Possible changes after the Skype IPO
Skype claims that its Initial Public Offering will be used mostly to raise funds. In the end, though, offering stock can fundamentally change the goals of a company. With investors demanding profits, Skype could be pushed into revenue-producing moves that they may not have otherwise undertaken. While this could provide the capital for improvements to the popular Skype service, it could also backfire. Skype is already moving forward with the iPhone app and deals with wireless carriers. Nothing is for certain yet, so Skype’s 500 million users will have to wait to see what the effect of the Skype IPO will be.
This will only work if it emulates the Google IPO. (Individual investor access)