eHarmony’s IPO Plans

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The unofficial eHarmony blog compares my thoughts about eHarmony’s acquisition plans with Mark Brooks. Original Post is here.

Mark Brook says,

Waldorf says eHarmony has pass the minimum requirements for an IPO, but it has no capital needs at present.

Mary.com could be an attractive target for an eHarmony acquisition.

It is possible that eHarmony is hesitant to go public because of its failed foray into social networking businesses.

It’s also possible that eHarmony is lying low because of Chemistry.com’s ad campaign last year.

Dave Evan says,

Going public will be a disastrous move right now.

eHarmony has a strong balance sheet, solid leadership and a fairly clear vision for moving forward.

The Chemistry campaign didn’t perform as well as expected. eHarmony and Chemistry are exactly where they were 12 months ago.

eHarmony has been talking about an IPO for years. Passing the minimum requirements to go public is a long way off from actually ringing the opening bell. I worked with a company a few years ago that had to pull their IPO the night before. There are a million ways an IPO can go south and with yesterday’s Wall Street catastrophe, is an IPO realistic for eHarmony?
The one good thing about an eHarmony IPO is the transparency we would have into their financials. How many paying customers, how long does a customer stick around, how much are they worth? What are the spending on marketing and customer acquisition costs?
One this is for certain, I would love to see the eHarmony prospectus.

There are lots of companies that make sense for eHarmony to acquire. I’m not going to talk about acquisition targets, thats for another post. If eHarmony can afford to acquire companies before an IPO, then what’s the money for? Remember, eHarmony raised $110 million several years ago. Has this money been paid off or are they looking to do that with IPO proceeds? I am not a CFO, but I do have a sense of how the markets view online dating, and with Spark trading at $4.36, what do investors see in eHarmony?
I’d love to hear Mark Brooks chime in on his comment about eHarmony’s association with social networking. Facebook and Myspace make more than eHarmony and they haven’t even figured out their revenue models yet. Where’s the stigma there? If anything, investors see that dating industry growth has plateaued and social networking valuations are off the charts. Case in point, Bebo to AOL for $800 million.
There are a whole slew of Internet companies ready to IPO ahead of eHarmony. If you are an investor, are you going to jump on $10-$15 eHarmony shares on opening day and hope to sell them north of $25 or whatever they end up at? I’m interested to hear what readers think about this. Is eHarmony a good IPO candidate?