Skype begins move to list on Nasdaq

Skype has filed for an initial public offering, setting up what could be one of the biggest technology IPOs of the year.

The move would complete a rapid journey for the company, which less than a year ago was a subsidiary of Ebay.

Shares will be listed on the Nasdaq later this year, according to a filing with the Securities and Exchange Commission.

Skype’s document says it plans to raise up to $100m (£63m) in the offering. But the final sum, which could be much higher, will depend on the offer price and amount of equity.

The company traded hands last year at a valuation of $2.7bn and says its performance has improved since then.

Ebay sold Skype last November after a series of legal disputes between Skype’s management, its founders and Ebay. In the end, Ebay received $1.9bn for the company and retained a minority stake, short of the $2.6bn it paid for the company in 2005.

The new owners included Silver Lake Partners, the Canada Pension Plan Investment Board, and Andreessen Horowitz, a venture firm led by Netscape founder Marc Andreessen.

Skype’s founders, Niklas Zennstrom and Janus Friis, also joined the investment group after suing with claims that their company, Joltid, retained Skype’s key technology.

In the year to June 30, the company’s registered users rose from 397m to 560m. But most use the service for free. Just 8.1m pay, and those who do are expected to spend an average of $96 each this year

“We believe the scale, global distribution and growth of our user base provide us with powerful network effects, whereby Skype becomes more valuable as more people use it, thereby creating an incentive for existing users to encourage new users to join,” the company said in its filing.

Skype, which last year became the largest carrier of international calls, generated $406.2m of revenues in the first six months of 2010 but net income of just $13.1m.

To improve margins, Skype said it would focus on expanding its services for businesses and its advertising and licensing.

“We will continue to develop new monetisation models for our large connected user base,” it said. “We currently generate a small portion of our net revenues through marketing services (such as advertising) and licensing, which we expect will grow as a percentage of our net revenues over time.”

Skype’s filing comes a week after Demand Media filed for its own IPO, and could signal an opening in the long-stagnant market for public offerings.

Goldman Sachs, JP Morgan and Morgan Stanley are underwriting the Skype IPO. Citi, Credit Suisse and others are also taking part.

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