Penthouse, the famous media group popular for its adult content is planning to come out with an IPO or Initial Public offering. The aim is to raise around 250 million dollars. If the news (rumors) are to be believed, then the Penthouse media group would file the IPO documents with the Securities and Exchange Commission sometimes in the second quarter of the current year 2008.
I would say that this is an interesting development. The IPO market, the stock market, the forex market, the entire economy is falling. If someone like the Penthouse media group can take the brave front and come out with an IPO during such turbulent times, then it will be really of an interest. Penthouse media is in the business of adult entertainment.
The move by the group may have been motivated by the existing Playboy Enterprises, which is listed on NYSE with the ticker symbol PLA. However, the returns on Playboy have been devastating for the investors. Playboy Enterprises hasn't traded over $20 since 2000, $15 since 2006, and as of Friday it closed at $8.50 a share. Will Penthouse also meet the same fate?
With the print media being overtaken by the internet media, who would invest in the IPO? But there is a difference. Penthouse Media owns AdultFriendFinder website and has 22 million 'active' members..
Also, Penthouse Media Group's recently acquired other sites, which also include Passion.com and BigChurch.com, a site for Christians who want prayer mates, have a total of 45 million active members. Is this what will make Penthouse a sustainable investment for investors willing to get onto the Penthouse IPO?
Related: American Water Works IPO Review
Another problem is with the ethical front. As there are numerous Ethical Funds available, and the number of investors continues to grow, how would such adult business continue to sustain? Continued problem is that more and more investors growing mature, may not be willing to trade on such shares belonging to these kind of businesses.
Another thing to wonder is how are the book running lead managers of this IPO going to promote this IPO which is in the business of adult content? Wont they be a lot more hesitant?
| As of now, the IPO or initial public offering from Penthouse may be just a news, so no information is available about the valuations, listing date and price band of the shares being offered. But surely, it will make an interesting case in the history of IPOs. We’ve seen the fate of Playboy shares, lets see how the Penthouse IPO, if it comes, performs. | Table of Contents |
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