MicrostockGroup
Macro Stock / Midstock => General Macrostock => Topic started by: PaulieWalnuts on February 25, 2008, 09:10
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It'll be interesting to see what happens to Getty and what they decide to do with Istock.
http://biz.yahoo.com/ap/080225/getty_images_sale.html?.v=1 (http://biz.yahoo.com/ap/080225/getty_images_sale.html?.v=1)
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Interesting news indeed! Looking forward to the changes that could be ahead!
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I'm really surprised that they paid so much for it. With microstock taking a firm hold in the industry, I don't see profits for this company going anywhere but downward.
But the real travesty in this, is that not one artist will probably make anything from this sale. Without our images, this company would be an empty shell and worthless.
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Actually Getty has a phenomenal return on invested capital.
And if you take iStock as an example, they have more sales per image on a larger portfolio with higher prices each year and on the operational side they have economies of scale.
You can be sure that iStock is worth a lot more than the 50 million that was paid for it. On a 10X sales multiple one could see IS being worth $250 million today and thats only a small part of Gettys business.
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They haven't paid that much for it as a few months ago the shares were worth more than they are now offering. They probably have to pay this much to get all the shares. A lot of people would have paid more for their shares than this offer and I think they have to buy a large percentage to be able to compulsory purchase the rest.
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I'm really surprised that they paid so much for it. With microstock taking a firm hold in the industry, I don't see profits for this company going anywhere but downward.
Maybe. But it is still Getty Images, you know, and there is a lot of history behind that name.
I don't regularly buy weekly magazines (our local equivalents to Newsweek and such), but I had one in my hands the other days and I noticed the credits to stock agencies - big ones, such as Latinstock and another I forgot the name - and those were not celebrities images, there were many generic ones you could find in microstock.
Regards,
Adelaide
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Interesting news!
I guess things are going to change drastically!
If a private equity investment firm invests that kind of money, I'm sure they want to see something back on the long term, and with profit ofcourse.
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Actually Getty has a phenomenal return on invested capital.
And if you take iStock as an example, they have more sales per image on a larger portfolio with higher prices each year and on the operational side they have economies of scale.
You can be sure that iStock is worth a lot more than the 50 million that was paid for it. On a 10X sales multiple one could see IS being worth $250 million today and thats only a small part of Gettys business.
Getty has a ROI of 8.09%, a ROE of 9.41%, both are well below the industry average (half). Not to mention its EPS is -7.34%. Istock is the only bright spot in an otherwise poorly performing company, and unfortunately iStock is a very small part of Getty.
I don't think the firm will just sit on Getty, waiting for a better market. They will have to do something. The stock industry has gone from a duopoly, with monopoly pricing power, to a open market and Getty hasn't really adjusted. What they'll do, I'm not sure, but it will be interesting to watch.
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Private equity companies don't care how much they pay. It is all about negative gearing to avoid paying tax