Author Topic: Shutterstock IPO Pricing Revealed (Read 11476 times)

leaf · « **on:** October 01, 2012, 04:13 »

Here are three articles talking about Shutterstock's IPO offering. It looks like the price of the stock will be around $14-$16. They'll raise between $54 - $80 million from the sale (which is down from the initial $115 million hope)

Nasdaq.com
TechCrunch
Reuters

.. so who's buying stock?

I think it would feel nice to own stock in company I work with and to collect a bigger chunk of my sales in a way, but on the other hand, if I were to invest $10,000 in any company on the stock market other companies may be a better buy. Thoughts?

gostwyck · « **Reply #1 on:** October 01, 2012, 04:42 »

Interesting. I see the Reuters notice points out that the initial 'value' is not particularly significant in the way that these things work;

"The amount of money a company says it will raise in its first filing is used to calculate registration fees and is often a placeholder, with the actual proceeds being different."

Interview below from 'The Verge' with Shutterstock's SVP, Dan McCormick, on the IPO offering and the latest search technology that they're working on;

http://www.theverge.com/2012/9/19/3348446/shutterstock-microstock-image-search

etienjones · « **Reply #2 on:** October 01, 2012, 05:33 »

After witnessing the disaster of the Facebook IPO, I would wait until the stock reaches its “True” price, and not get suckered on the hype like a lot of people did with FB.

rubyroo · « **Reply #3 on:** October 01, 2012, 05:43 »

I'm just relieved that the controlling share will stay with Jon.

RacePhoto · « **Reply #4 on:** October 01, 2012, 16:57 »

Facebook is one of the worst in history, maybe people should consider some others?

VISA's IPO By the end of the day, the company's stock traded at $44 a share. The following day, it traded at $66
Google = Total return from offer price: +610.59%
Master Card = Total return from offer price: +971.59%

Not saying SS will go up like a big balloon, but don't think that it's going to be anything like Facebook which was over hyped and the greedy people pushed the price up. Expect SS to be less volatile.

CarolinaSmith · « **Reply #5 on:** October 01, 2012, 17:59 »

I love SS and have been a contributor since 2005, but I will not be buying any stock right off the bat. To do so without knowing if institutional investors will get on board ('Smart Money') amounts to speculating/gambling versus investing for the retail investor (known on Wall Street as 'Dumb Money').

SS will not have the the public interest of a Facebook, Yahoo, etc. so you don't have to worry about missing the train out of the station. How many people still go 'huh?' when you even mention the term stock photography, let alone 'microstock'? Besides, other important things to know would be lockup period, etc.... Look how much further FB fell when the lockup period was over.

I'll let the Smart Money with their smart analysts advise their institutional clients whether SS is a good buy as a stock, and if it is, the Smart Money will move the stock price. Just look for price action on high volume (and even what is low, normal, or high volume will take time to establish). As retail investors, we can only go along for the ride, but I have no idea what direction from the $13-$15 range that is.

Normally, one could look at cohorts to see how a group of like stocks is moving (metals, tech, transportation, etc), but with Getty being taken private, Corbis being private (ala Bill Gates), and Sipa (I read it is the third largest stock agency in the world?? owned by a German group), it's hard to know how it would do. Too much in the dark for me to just 'buy and hope'.

There ain't gonna be a public frenzy over Shutterstock, so you don't have to 'jump in'. If there is value, then there will be plenty of time to get on board and hopefully grow with the company. I wish SS all the best!

gostwyck · « **Reply #6 on:** October 01, 2012, 19:13 »

^^^ Great post! Have to say, at the mid-point price range, which values the business at $460M, it looks very expensive to me based on their latest published figures.

I think the market for microstock is maturing rapidly so I don't think there is anything like the massive potential for rapid growth that have been the hallmark of the dot.com bubble floatations (the vast majority of which have ended in spectacular failure).

BaldricksTrousers · « **Reply #7 on:** October 02, 2012, 07:04 »

In any case, it is best to put your money into something that is separate from you source of earnings. That way, if one of them goes wrong they don't both go wrong.

noodle · « **Reply #8 on:** October 02, 2012, 07:29 »

This will make stock a tougher business to be in...

Being a publicly traded company, there will be enormous and constant pressure for earnings growth - after all growing earnings is what justifies and grows the share price for a company. If earnings are stagnant, then share price will be at best stagnant
So one must take an overview of the entire industry - are microstock sales going to keep growing from growing demand, or is the market already saturated, and competitors, who are they, do they pose a threat to taking some earnings away from ss?

I think that sooner or later ss will not be as good a place as it has been up til now for image contributors view - they will have to continue to grow profits by a/ getting new customers to buy their product ( how? one way is by being very competitive with pricing) and b/ by taking a bigger share of the pie ( i.e. lowering contributors commissions)

this is just the way I see things, but I hope theyprove me wrong in the long run

Personally I would rather invest in other sectors that will be guaranteed to see growth because of the worlds growing population and everything that it entails.

cthoman · « **Reply #9 on:** October 02, 2012, 09:25 »

Quote from: noodle on October 02, 2012, 07:29

I think that sooner or later ss will not be as good a place as it has been up til now for image contributors view

That time is already happening now for me, so I don't really have to imagine. I don't know much about stocks, but I'd definitely be wary about investing money. I just don't have a lot of faith in the long term future success of some of these micro companies. There just seems to be some inherent flaws in their models.

michaeldb · « **Reply #10 on:** October 02, 2012, 11:00 »

Quote from: gostwyck on October 01, 2012, 04:42

Interview below from 'The Verge' with Shutterstock's SVP, Dan McCormick, on the IPO offering and the latest search technology that they're working on;

http://www.theverge.com/2012/9/19/3348446/shutterstock-microstock-image-search

Terrific link! In the scenario described in the article, in a future when most image-seekers get their images from free sources, SS will really be in the search business, competing with Google, presumably.

Personally, I doubt this will happen. But if it, or some other unforeseeable sea-change does occur, then potential investors in SS stock might be wise to think in terms not of current stock prices or SS's revenues. But maybe think more like Warren Buffet does, that you really are investing the company's management. If microstock changes entirely in the next, say, five years, which company's management would you bet would be able to adapt to the changes and prosper in the new environment?
A. iStock
B. Shutterstock
C. Dreamstime
D. Fotolia
A person who picked 'C', might be smart to consider jumping on the SS train for the long run, and not worrying too much SS's stock price in the early post-IPO period, or even stock market conditions for the near-term (which look very ominous). Of course, if the article is right, and if IS, FT, and DT were to all go out of business, then SS vs. Google would be a different ball game.

Personally, I don't think that Google vs SS is what will happen, and I think betting on SS's management to win the microstock game might be a smart play.

sharpshot · « **Reply #11 on:** October 02, 2012, 12:12 »

Quote from: BaldricksTrousers on October 02, 2012, 07:04

In any case, it is best to put your money into something that is separate from you source of earnings. That way, if one of them goes wrong they don't both go wrong.

That seems very sensible but it would be nice to make some money from the future Getty hostile takeover

I hope that never happens but it wouldn't surprise me.

RacePhoto · « **Reply #12 on:** October 02, 2012, 13:45 »

Quote from: sharpshot on October 02, 2012, 12:12

Quote from: BaldricksTrousers on October 02, 2012, 07:04
In any case, it is best to put your money into something that is separate from you source of earnings. That way, if one of them goes wrong they don't both go wrong.
That seems very sensible but it would be nice to make some money from the future Getty hostile takeover I hope that never happens but it wouldn't surprise me.

If there was a Getty hostile takeover (and I doubt it) the word Microstock would be changed to "Doomed".

What BT is saying is diversity in investment, and that's a good point.

Quote from: gostwyck on October 01, 2012, 19:13

I think the market for microstock is maturing rapidly so I don't think there is anything like the massive potential for rapid growth that have been the hallmark of the dot.com bubble floatations (the vast majority of which have ended in spectacular failure).

Also a good fact to consider. Probably unknown in the general market and slow changing.

It's intended to raise capitol, not to provide a free lunch to some inside IPO speculators.

velocicarpo · « **Reply #13 on:** October 02, 2012, 14:01 »

Well, I do daytrading from time to time - depending on the current economic climate - and this very successfully until now (knocking on wood).

I would not recommend to buy SS (what will be the official coding?) . At least wait a bit. The industry is moving very fast and there is LOTS of competition. Furthermore the product is virtual and expresses no real value. If you take a company like Apple: they have stashed up loads of Cash and liquidity. This is a _real_ value which backs up any investment. Then look at SS: digital images which are owned by third party. They may loose them for anything like contributor decisions or technical failures. No real value there. And they have to stand up against laods of competition which may literally grow out of nothing - or just another guy with a nice script.

Growth: Where is there any growth in the market? Almost all Agencies are losing traffic (and most probably therefore money). Costs are rising month by month (storage e.g.) You cannot raise prices with this competition neither. Squeeze Contribs? Yes, most probably, but this strategy has limits too as the past has shown.

Form a Photoq standpoint: I am almost sure that this is the end of SS as we know it, and change will not be for the good. A stock company (stock as for stock trading not MS) has to raise profits CONSTANTLY and as such by nature HAS TO ABUSE all SUPPLY CHAINS as long as there is no real market growth which allows steps such as price raising which is in the current climate mostly the case with commodities (oil, gold, food,....) because they cannot be replicated infinitely (like digital products).

EmberMike · « **Reply #14 on:** October 02, 2012, 15:14 »

I know absolutely jack squat about stocks, but I have a long history of missed stock opportunities. I remember looking at Apple when it was $85 and thinking, "Man that seems steep. Maybe I'll try it if it comes down a little. But how much higher could it really go?" Then I was in on this little company called Chipotle when it was at it's cheapest, and bailed because I didn't think it was going anywhere (hit 10x what I paid). I passed on stock options at a company I worked at because I thought the company was tanking and I abandoned the sinking ship only to get an email from a former co-worker years later celebrating the NewsCorp. acquisition of the company, to which I cringed as I replied, "Yeah, I passed on the options."

Somehow, SS feels like something I should want to be involved in. Not sure why, though. But I keep having a similar feeling I had on some of these other companies that I was hesitant about and then blew up.

We'll see, I guess. Maybe I'll finally stop being a wuss and roll the dice on this.

gostwyck · « **Reply #15 on:** October 02, 2012, 17:50 »

Quote from: velocicarpo on October 02, 2012, 14:01

Form a Photoq standpoint: I am almost sure that this is the end of SS as we know it, and change will not be for the good. A stock company (stock as for stock trading not MS) has to raise profits CONSTANTLY and as such by nature HAS TO ABUSE all SUPPLY CHAINS as long as there is no real market growth which allows steps such as price raising which is in the current climate mostly the case with commodities (oil, gold, food,....) because they cannot be replicated infinitely (like digital products).

^^^ Utter nonsense. If ever there was a time to raise prices and abuse suppliers it would be before you float on the market in order to maximise profit and thereby the sale price. Not only did Oringer not do that he also trebled the R&D expenditure in 2011 which effectively halved his profits for that year.

Oringer is the real deal, a born entrepreneur. He hasn't raised prices or cut commissions because he didn't need to. He let his competitors do all that whilst he sat back and watched their customers come to him. He knows exactly how price-sensitive or otherwise his customers are because he monitors their behaviour very closely for several months, after he introduces a price increase, before he then awards a commission rise to contributors. He also values his contributors because he has always had to tread the tightrope of paying them as much as he could afford to avoid them going exclusive to Istock. He's pretty much the only reason that we are not all exclusive at Istock (and, somewhat ironically, the main reason that Istock introduced the exclusivity programme in the first place).

Oringer will be under no pressure whatsoever after the IPO. Apart from the fact that he has already made his personal fortune (he'll certainly never need to work again) he still retains 56% of the business. The shareholders can't sack him and nor can they prevent him doing what he wants to with the business. Good.

Oringer has grown SS organically (at the risk of using that horrible expression) by increasing the customer base, introducing new products and providing a much better service to customers than his competitors. I see nothing that is likely to change in that regard. The IPO is supposedly intended to fund a potential acquisition, which for my money can only mean DT as IS is not for sale and FT probably too expensive. Any other microstock agency he could pay for out of petty cash.

Personally, with nearly 8 years of of contributing to SS, I have every confidence in the future of the business and Oringer's stewardship. I'd be worried if he resigned or sold out, but not until then.

velocicarpo · « **Reply #16 on:** October 02, 2012, 19:24 »

Quote from: gostwyck on October 02, 2012, 17:50

Quote from: velocicarpo on October 02, 2012, 14:01
Form a Photoq standpoint: I am almost sure that this is the end of SS as we know it, and change will not be for the good. A stock company (stock as for stock trading not MS) has to raise profits CONSTANTLY and as such by nature HAS TO ABUSE all SUPPLY CHAINS as long as there is no real market growth which allows steps such as price raising which is in the current climate mostly the case with commodities (oil, gold, food,....) because they cannot be replicated infinitely (like digital products).

^^^ Utter nonsense. If ever there was a time to raise prices and abuse suppliers it would be before you float on the market in order to maximise profit and thereby the sale price. Not only did Oringer not do that he also trebled the R&D expenditure in 2011 which effectively halved his profits for that year.

Oringer is the real deal, a born entrepreneur. He hasn't raised prices or cut commissions because he didn't need to. He let his competitors do all that whilst he sat back and watched their customers come to him. He knows exactly how price-sensitive or otherwise his customers are because he monitors their behaviour very closely for several months, after he introduces a price increase, before he then awards a commission rise to contributors. He also values his contributors because he has always had to tread the tightrope of paying them as much as he could afford to avoid them going exclusive to Istock. He's pretty much the only reason that we are not all exclusive at Istock (and, somewhat ironically, the main reason that Istock introduced the exclusivity programme in the first place).

Oringer will be under no pressure whatsoever after the IPO. Apart from the fact that he has already made his personal fortune (he'll certainly never need to work again) he still retains 56% of the business. The shareholders can't sack him and nor can they prevent him doing what he wants to with the business. Good.

Oringer has grown SS organically (at the risk of using that horrible expression) by increasing the customer base, introducing new products and providing a much better service to customers than his competitors. I see nothing that is likely to change in that regard. The IPO is supposedly intended to fund a potential acquisition, which for my money can only mean DT as IS is not for sale and FT probably too expensive. Any other microstock agency he could pay for out of petty cash.

Personally, with nearly 8 years of of contributing to SS, I have every confidence in the future of the business and Oringer's stewardship. I'd be worried if he resigned or sold out, but not until then.

Maybe you haven`t fully understood what I was saying or I expressed myself bady since english is not my native language, but I noted e.g. that the impossibility to raise prices sets pressure onto us - the contributors - since this is the only way left of the two to deliver the growth in numbers a stock company needs to show in order to satisfy investors.

Or in other words to make it simpler to understand: if you wanna make more Profit you have to a) earn more or b) spend less or c) both of it. Looking at the current traffic stats, the published SS numbers (Leaf posted some info in another thread) the high competition and the general market situation I believe that increasing the overall sales without increasing the cost by a at least equal level is difficult if not impossible for SS. Therefore SS will be left with the second possiblity: cut costs - and here we may talk about royalties.

However, I hope I am wrong and you are right. My current personal experience with SS is that I have to upload huge amounts to stay steady with my income. The only push in earnings I noticed lately was the rush of enhanced licenses which has dried out sadly.

cthoman · « **Reply #17 on:** October 02, 2012, 20:15 »

Quote from: velocicarpo on October 02, 2012, 19:24

...deliver the growth in numbers a stock company needs to show in order to satisfy investors.

This is kind of an interesting expression because I kind of feel like it is talking about me too as a contributor (not as an investor).

Quote from: velocicarpo on October 02, 2012, 19:24

My current personal experience with SS is that I have to upload huge amounts to stay steady with my income. The only push in earnings I noticed lately was the rush of enhanced licenses which has dried out sadly.

That was kind of the conclusion I came to as well, and I decided I didn't want to continue to keep feeding the beast more and more as the years go on. I just wasn't sure I could keep up. Although, they did prove me wrong by selling a bunch of extended licenses this month. But, last month was pretty awful (circa 2008).

sharpshot · « **Reply #18 on:** October 03, 2012, 00:46 »

Quote from: velocicarpo on October 02, 2012, 19:24

...the impossibility to raise prices sets pressure onto us - the contributors - since this is the only way left of the two to deliver the growth in numbers a stock company needs to show in order to satisfy investors....

Perhaps subscription prices can be raised. Look how much pay per download prices have been raised over the years. Buyers seem to stick with the site they like, unless prices go too high. They don't seem to all move to the cheapest site every time prices are raised.

Then there's the higher priced market that Getty seems to have most of at the moment. Perhaps SS will go after a slice of that? I can see several ways they can keep growth going without taking money from us. Cutting the amount they pay their suppliers is unsustainable. Sites can't go any further than paying us nothing and most of us are probably on the brink of thinking microstock isn't worth it anymore. It really doesn't look like cutting commissions has helped istock and FT.

velocicarpo · « **Reply #19 on:** October 03, 2012, 09:49 »

Quote from: sharpshot on October 03, 2012, 00:46

Quote from: velocicarpo on October 02, 2012, 19:24
...the impossibility to raise prices sets pressure onto us - the contributors - since this is the only way left of the two to deliver the growth in numbers a stock company needs to show in order to satisfy investors....
Perhaps subscription prices can be raised. Look how much pay per download prices have been raised over the years. Buyers seem to stick with the site they like, unless prices go too high. They don't seem to all move to the cheapest site every time prices are raised.

Then there's the higher priced market that Getty seems to have most of at the moment. Perhaps SS will go after a slice of that? I can see several ways they can keep growth going without taking money from us. Cutting the amount they pay their suppliers is unsustainable. Sites can't go any further than paying us nothing and most of us are probably on the brink of thinking microstock isn't worth it anymore. It really doesn't look like cutting commissions has helped istock and FT.

I hope you are right. Time will tell...when exactly is the IPO again?

RacePhoto · « **Reply #20 on:** October 04, 2012, 01:28 »

SSTK will be the symbol

I'm considering selling some of the last stock I hold, for this. It's not going to rocket up and not going to be a huge gain stock. I think it will be just like SSTK has been. Slow and steady increases for a long time.

Jo Ann Snover · « **Reply #21 on:** October 11, 2012, 12:45 »

So it happened - and apparently has been warmly received by Wall Street - see lots of articles
http://blogs.marketwatch.com/thetell/2012/10/11/shutterstock-ipo-up-30-after-ceo-pitches-lure-of-photos-for-businesses/
http://news.investors.com/technology/101112-628949-4-ipos-price-high-and-pop-in-trading.htm
http://online.wsj.com/article/SB10000872396390443294904578050440786530634.html

tab62 · « **Reply #22 on:** October 11, 2012, 12:52 »

Just got an email from Shutter thanking us for making them a great company- nice letter...

Tantoon · « **Reply #23 on:** November 05, 2012, 03:47 »

Quote from: gostwyck on October 01, 2012, 04:42

Interesting. I see the Reuters notice points out that the initial 'value' is not particularly significant in the way that these things work;

"The amount of money a company says it will raise in its first filing is used to calculate registration fees and is often a placeholder, with the actual proceeds being different."

Interview below from 'The Verge' with Shutterstock's SVP, Dan McCormick, on the IPO offering and the latest search technology that they're working on;

http://www.theverge.com/2012/9/19/3348446/shutterstock-microstock-image-search

don't do it.. both ways.. we're artists not investors

sgoodwin4813 · « **Reply #24 on:** November 05, 2012, 08:19 »

Why can't artists be investors, too? They're not mutually exclusive.

I thought about buying some SSTK but wasn't enthusiastic enough to actually do it. I just checked today and it is around $24.75 after starting at $21 - more than a 17% increase. If you had invested $2000 initially you would have made more than $350 so far - not spectacular but not bad (and much better than return on some of the smaller microstock sites). Certainly a far better investment than facebook!

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Author Topic: Shutterstock IPO Pricing Revealed (Read 11476 times)

leaf

gostwyck

etienjones

rubyroo

RacePhoto

CarolinaSmith

gostwyck

BaldricksTrousers

noodle

cthoman

michaeldb

sharpshot

RacePhoto

velocicarpo

EmberMike

gostwyck

velocicarpo

cthoman

sharpshot

velocicarpo

RacePhoto

Jo Ann Snover

tab62

Tantoon

sgoodwin4813

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