Penthouse to Offer $250m IPO

[gonzo]

LOS ANGELES – General Media Inc., the company behind Penthouse Media Group, is reportedly turning to Wall Street in an effort to raise $250 million to fund its expansion.


According to Penthouse chief executive officer Marc Bell, the company will file a registration statement sometime during the next few months, with plans for an initial public offering to sell common shares, with a goal of paying down the company's debt.

The popular men's magazine has been reinvented as a "lad" magazine, similar to Maxim, in an effort to halt its dwindling subscription sales.
"We put the magazine back to its roots, where it used to be," Bell told Reuters. "We made it a young man's magazine, slightly edgier pictorially than Playboy."

Penthouse has been working to extend its brand's reach online, with recent acquisitions such as its December, 2007, purchase of Adult FriendFinder parent Various Inc., its two dozen websites and affiliate base.
Following the Various deal, Penthouse estimated its 2007 revenue at $340 million, which roughly matches rival Playboy Enterprises' reported 2007 revenue of $339.8 million.

Bell sees the online space as a growth sector for the company, with "plans on leveraging the brand as we move forward."
"The magazine is where we want it," Bell said. "As far as the website, you'll have to read about it."

[RawAlex]

They have to raise the money to pay off Andrew and Lars, I guess.

[gonzo]

Originally Posted by RawAlex

They have to raise the money to pay off Andrew and Lars, I guess.

I had you in mind when I posted this.

Looks like our crystal balls were dead on.

[ali25extreme]

Your balls are crystal? Sweet! ...

[Ambergirl]

Muy Interesante

[gonzo]

Originally Posted by ali25extreme

Your balls are crystal? Sweet! ...

They have been a little cloudy as of late though.

[miz_wright]

... that barely even qualifies as a small-cap stock, and most funds won't bother touching it in quantity.

So... Um... Who's gonna buy it? Volume's incredibly low in the adult public offerings, and the p/e is generally wacked.

[RawAlex]

Considering that Penthouse (previous company) went tits up in a pretty serious way, and that most print magazine and news companies are suffering greatly due to loss of advertising revenue... I think this one is all wish and very little reality.

I will say this: if they have 250 million of debt on their books against less than 400 million gross revenue, they are probably having a tough time moving ahead, and certainly getting that debt off the books would be a move to make the company financially much more sound.

I think that taking the company public again is part of the deal with Andrew on all of this: Pay us $X now, and give us X millions of shares in the new public offering of penthouse at a significantly lower price than the intial offering. Let us make out money by slowly but surely selling off our interests.

Andrew always wanted to take AFF public, but knew that a pure internet porn play wasn't going to float. Putting under the Penthouse name makes it also palatable to a larger group of investors, the same ones that would buy Playboy stock.

[gonzo]

Originally Posted by RawAlex

Putting under the Penthouse name makes it also palatable to a larger group of investors, the same ones that would buy Playboy stock.

I have a large chunk of Playboy stock and I wouldnt even consider the new den of thieves at Penthouse.

Not even Earl Miller can save this one.

[Toby]

What will happen to the stock price when AFF gets sued for actively supporting content piracy? Being a publicly held company may actually make it easier to get them to settle rather than spend years in court.

[Hell Puppy]

I'm sure they think with the insane valuation that Facebook has, they should be able to see some hefty valuation based on AFF.

Going public gives you some interesting finance and buy out options. Anyone have anything they wanna sell for a fraction of what it's worth a ton of highly speculative stock?

I haven't looked at the IPO or crunched the numbers for the simple reason I wouldn't touch them with a 10 foot pole. In my opinion, the principles involved have a bit of a reputation for short term thinking....I dont see them wanting to build and grow so much as cash out what they already have. Investors at some point could potentially be left holding the bag.