Wednesday, July 13, 2011

Nexon is the Arvydas Sabonis of the "Tech IPO Draft"

Last month I wrote a light piece over at Technorati listing my top picks in a mock "Tech IPO Draft". Here's the combined version of those two articles, which lists these companies:

1. Facebook
2. Groupon
3. Trulia
4. Legalzoom
5. Zynga
6. Gilt Groupe

What I wanted to include on this list but didn't get a chance to was Nexon, Korea's leading online gaming company. I would have compared Nexon to Arvydas Sabonis. Not so much that Sabonis was a fading talent when he entered the NBA, but because he played many of his prime years overseas in Russia. A better sports analogy would have been Ichiro Suzuki since he went "public" in Japan, came to Major League Baseball, and still kicked ass for years. But I have to stick with the basketball theme here.

Most likely, Nexon will go IPO in Japan next year and I heard from investment banking contacts that they are looking at a US$10 billion IPO. I know industry people question why Nexon is going public in Japan since it's not an ideal public market and they would have gotten far better multiples in the U.S. They will hit over $1 billion in revenues this year and their margins are far better than it's U.S. counterpart, Zynga. They still have many years ahead to prove that they are global player and not just dominant in Asia, so many a better comparison for Nexon is Dirk Nowitzki.

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