Hey Global Investor, here’s what you need to know before the US markets open.
Market Snapshot 📈
S&P 500 (Friday’s Close) 4,204.11 +3.23 (0.08%)
NASDAQ (Friday’s Close) 13,748.74 +12.46 (0.10%)
FTSE 100 (5 PM IST) 7,104.50 +81.89 (1.17%)
NIFTY 50 (Today’s Close) 15,574.85 -7.95 (0.05%)
USDINR (Today’s Close) 72.90 (1 Year -3.43%)
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🎥 Vimeo: Transformation Complete?
Video software company Vimeo Holdings Inc. (VMEO) became the 11th public company to be spun off from Barry Diller’s InterActive Corp. (IAC). Its transformation from a niche filmmaking platform into a business video platform has been nothing short of spectacular, courtesy of its CEO. (Tweet This)
Vying With The Giants
Vimeo was founded in 2004, by Connected Ventures. Barry Diller, former chairman of InterActiveCorp, acquired Connected Ventures in a $30M deal in 2006. Vimeo thus became part of IAC in what IAC’s CEO Joey Levin calls a “purchase by accident.”
Also in 2006, another “small” video sharing platform YouTube was acquired by Google. Vimeo had to decide quickly whether to position itself as a video sharing platform Vs. being a content creator. It became the first video-sharing site to offer high-definition (HD) content to users in 2007.
Vimeo planned to foray into the Video-on-Demand market with its own original programming in 2016. It acquired VHX and Livestream in 2016 and 2017 respectively, to bolster its service offerings as Vimeo OTT. All that said, its 1M subscribers paled in comparison to Netflix’s 100+M subscribers. Vimeo had little option but to shut down its streaming division.
New CEO = New Lease Of Life
This realization was exactly what Vimeo needed in order to find its true calling. It decided to become a pure-play video software provider for businesses in general, not just filmmakers. The task was entrusted to the director of marketing Anjali Sud, who took over as the new CEO in 2017.
The turnaround followed soon thereafter. Vimeo positioned itself as a one-stop-shop to shoot, edit, store and distribute video. Subscriptions started at $7 per month for a basic package and went as high as $20K per month for clients such as Amazon and Starbucks. The numbers spoke for themselves.
In Q1 2021, Vimeo had sales of $89M, a 57% growth Y-o-Y. Subscribers rose 25% to 1.6M while Average Revenue Per User (ARPU) saw a 27% jump to $233, which was a record high. In November, the company was valued at $2.8B. Just two months later, a funding round of $300M valued the company at $6B.
It was finally time to chart its own course. Vimeo’s shareholders agreed for the company to be spun-off from IAC and be a standalone public company. On the first day of trading, the shares were down 13%. Even so, its market cap of $7.2B was 20% higher than its valuation in January. Today, its market cap is slightly lower at $6.9B.
The vagaries of the stock market notwithstanding, Vimeo is focused on long-term growth and is already on the lookout for its next acquisition target. The pandemic was a shot in the arm as more businesses and people adopted it for communicating and conducting business more effectively.
After its fair share of struggles early on, Vimeo seems well-positioned to capture the images and imagination of businesses around the world without any buffering.
VMEO ended the day at $42, up 5%.
Company Snapshot 📈
VMEO $42.00 +2.00 (5.00%)
Analyst Ratings (3 Analysts) BUY 67% HOLD 33% SELL 0%
Reasons: Tesla’s vehicle price increases due to supply chain pressure, says Musk (TSLA -0.89%)
Capex: Kraft Heinz to invest $199M in British manufacturing facility (KHC +0.37%)
One Step Closer: KKR and CD&R close to $4.7B deal to buy out Cloudera (CLDR Unch)
Later Today 🕒
- Zoom Video Communications Inc. Earnings (ZM)
- Hewlett Packard Enterprise Co. Earnings (HPE)
- Costamare Inc. Earnings (CMRE)
- Cognizant Corp. Annual General Meeting (CTSH)
- 7:15 PM IST: Markit Manufacturing PMI (Final)
- 7:30 PM IST: ISM Manufacturing Index
Fun Fact of The Day 🌞
Out of the nearly 28M small businesses in the US, 22M consist of one lone employee