Is Ocado Worth More Than 1 Billion British Pounds?
Jul 23rd, 2010 by admin
How much is an online supermarket like the British Ocado worth, when they can raise revenues of 427 million pounds (2009) but can barely turn a profit? In the run up to a planned IPO, last weeks proclaimed valuation of over a billion pounds met with a healthy amount of scepticism:
Picture of Supermarkets: Is Ocado Worth More Than 1 Billion British Pounds? [source:excitingcommerce.com]
"Its proposed valuation range, with a midpoint of 1.18 billion pounds including the proposed fundraising, was greeted with scepticism by analysts and investors alike.
Shore Capital analyst Clive Black said the maximum value he would ascribe to Ocado was 534 million pounds, while Arden Partners' Nick Bubb also urged the firm to lower its sights.
"They are asking far too high a price," a fund manager from a major investment house told Reuters on condition of anonymity."
One of the most damaging reviews came from Moneyweek. Some other analysts are seeing a fair valuation at 560 million pounds. Ocado is naturally convinced otherwise. Other reports indicate that a market value of 800 million pounds could be in the making.
This debate is particularly interesting because the valuation of e-commerce firms working in low margin segments is already fairly well documented. Recently, Buy.com went to Rakuten for $250 million.
Ocado: How Big Is The Online Grocery Market Really? Rakuten On Their Expansion Plans with Buy.com and Priceminister Online Supermarket LeShop.ch Targets Revenues of $118 Million Originally posted in German by Jochen Krisch, adapted for excitingcommerce.com by Jason Soo. [source:excitingcommerce.com]
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