Shares in Mail.ru have surged 30% this week after they successfully raised $912m in London’s largest IPO since July. An unnamed source in the Moscow Times suggested they had received orders for 20x the shares available in the offering.
A large part of the success story has been put down to Mail.ru’s stake in Facebook but the engine has been doing exceptional well over the last 3yrs. From relative obscurity on the search scene they now control 10% marketshare, with their own search platform. They are well placed to grow fast over the next few years, especially if they develop a professional PPC engine to rival Yandex.Direct and Google Adwords.
Mail.ru owns 2.4 percent of Facebook, the world’s largest social networking service, according to an Oct. 11 statement. Mail.ru also has a 5.1 percent stake in Chicago-based Groupon, the Daily Deal web site with 20 million subscribers, and 1.5 percent of Zynga Game Network, the maker of the “FarmVille” and “FrontierVille” games.
Revenue at Mail.ru may increase 51 percent this year to $301 million, while earnings before interest, tax, depreciation and amortization are likely to rise 70 percent to $104 million, analysts at Goldman Sachs said in a note last month.
Mail.ru’s success will no doubt encourage other Russian tech firms to reconsider the IPO path. There were many reports that Yandex, Russia’s largest search engine was considering an IPO before the global downturn.