i check in with SharesPost on occasion to see how they are currently valuing Linden Lab’s private capital stock. lately it’s been pretty flat but i missed a may 16th “Research Update” (probably because i haven’t looked in the last two weeks) =p
the research report is created by Candlestick Advisors who also evaluates companies like facebook and they see Linden Lab as stagnating and being flat in growth
here are a few excerpts from their PDF:
- estimated market capital as of May 15th, 2012 – $186-232 million (vs. $288-334 July 2011)
- 2012 estimated revenue – $103 million | 2013 estimated revenue – $104 million
- estimated price per share of $2.9 – $3.6 for common shares, down 33% from our previous estimate of $4.5 – $5.2 to account for stagnating activity on Second Life
- user hours have decreased continuously for two years to reach 408M hours in 2011, compared to 435M hours in 2010 and 481M hours in 2009
- virtual currency exchanged on Lindex has stagnated and has declined for 2 quarters, from L$31.5M in Q1’11 to L$30.6M in Q2’11 and L$30M in Q3’11
About Candlestick Advisors -
Candlestick Advisors Pvt. Ltd. provides consulting and advisory support to the financial services industry. Founded in 2007, we combine Wall-Street expertise with strong analytic prowess. Our reports have been repeatedly hailed for consistency and accuracy in projections by our clients and the media.
erm. this estimated revenue figure doesn’t jive with @rodvik’s own announcement that Gross Revenue was running about $75 million (SLCC speech.) he seemed quite proud of that fact. subsequently, my good friend Inara Pey interpreted this to mean that Linden Lab was making a Net Income of $75 million, which i pointed out to her in a comment was a big mistake. (Inara then corrected the mistake in her content and deleted my comment.) i therefore, find these numbers highly suspect, although i’m pretty sure that BK Linden probably won’t try to point out the mistake. in the past BK has gone on record that these SharesPost numbers don’t relate to reality as he knows it. and after all, he of all people would.
Wizard Gynoid
25 May 12 at 2:52 pm
oh and also these figures don’t reflect the fact that sim counts are stagnant and even slightly declining. that would tend to suggest that revenue is not rising, since tier and sim sales is the primary revenue source for Linden Lab.
Wizard Gynoid
25 May 12 at 2:55 pm
I count 1000 fewer private sims based on Tyche Shepherd and she estimates $5.61 million per month for private sims
I think $70-75 million EBITDA is closer to the truth like you said
Ener Hax
25 May 12 at 3:22 pm
Sarge Misfit for CEO of Linden Lab!!
I can’t screw it up any worse than has already been done :-D
Have you seen Botgirl’s latest contribution to SL’s Sinking Saga? http://botgirl.blogspot.ca/ It goes back to 2003 now
Sarge Misfit
25 May 12 at 3:38 pm
can I haz position as your right hand girl Sarge? I wanna screw stuffz up as well !! \o/
Funneh thing I had a semi long decussion with someone last night about LL and their business (I use that word very lightly I might ad)
Basicly he was bitching about SL being crap and he didnt have any thing / any where to go and all he basicly did in SL was Troll and take a few classes (non building stuffs *cough*) and wouldnt it be better if LL took over the content creation in SL to make it more professional and have greater control.
I pointed out IF they did so (and colour me orange and stick me up an elefants bum bum if that isnt what Rodvik is contemplating #justsaying ) it would NOT be SL anymore.
He then proceeded to say that IF they did so they would make more money as they would have ful control over content and sales thereof.
I pointed out IF they did we would see mass exsoudus (oh dear I cant spell and to lazy to go to google) on a scale never seen before in SL history.
Now problem (as I see it) is that it is not really LL running the show anymore its the investors and they want a return on their money and they would like it last week if possible. So they start sticking their noses into something they basicly know nada about in an attempt to make a return on their investment.
Oh dear what a mess it is and LL has yet shown their ability to choose the wrong CEO … well at least they get that right even if its wrong *Sighs*
Lady Sakai
25 May 12 at 4:16 pm
*starts singing* Ener’s to the left of me, Lady’s to the right! Bet I can, be the C E O for you!
Think we can get permission for us to use the song for a campaign anthem? Anybody want to tackle a commercial to email around??
That would be too funny *laughs*
Sarge Misfit
25 May 12 at 5:04 pm
@ener actually no. not EBITDA. Gross Revenue is “Top Line.” that means all sales/revenues. then you have your Direct Costs, which you subtract from your Revenue and you get your Gross Margin/Profit. Direct Costs include Labor Costs and probably (in this case) Server and Network Costs. then you have indirect costs (like capital expenses) and finally you get to your Net Income/Loss, which is called the “Bottom Line.” this is before taxes. EBITDA is a Cash Flow value, which is important but is not to be confused with the Income Statement.
Wizard Gynoid
25 May 12 at 5:50 pm
Yes the $75m fiqure certainly seems the benchmark as it is thrown about by the CEO, and LL “insiders”.
From the press release: “The privately held company has had revenues exceeding $75 million and has been profitable (excluding restructuring and non-cash stock compensation expense) each of the last three years.”
I read that as $75m was a high point at some time, possibibly not any more, and for some time, ran at a loss due to non factored expenses.
Breen Whitman
25 May 12 at 6:04 pm
and I didn’t close the link to the newsletter! Oh well.
Breen Whitman
25 May 12 at 6:09 pm
@breen interesting that you speculate that LL was running a loss up until recently. by “non-factored expenses” you may mean their Income Statement was overstating income due to *missed* expenses. perhaps the discovery of these missed expenses had something to do with the mysterious dismissal of M Linden/Kingdon.
Wizard Gynoid
25 May 12 at 6:27 pm
M Linden and his sidekick Wallace Linden! they did a great job of adding to my bitterness of leaving Second Life! =(
Ener Hax
28 May 12 at 8:41 pm