IACI Investors Not Happy About Vimeo’s Valuation

Investors have reportedly balked at a $300 million valuation for hipster online video site, Vimeo, owned by InterActiveCorp (NASDAQ:IACI), who plans to sell a $50 million stake in the unit. According to reports, IAC will retain a 50 percent non-controlling interest, while selling 25 percent to new investors and the balance 25 percent earmarked for the management team.

Investors are not necessarily over the moon over the proposal, given that Vimeo‚Äôs revenues are a mere $5 million. The site depends solely on user-generated content from a 55 million “uniques” and loyal audience. Even big brother YouTube (NASDAQ:GOOG) finds it difficult to generate advertising revenues from the user-loaded content on its site, and has to invest in original content.

On the bright side, however, analysts expect that Vimeo could emerge from under the wings of IAC given a dose of fresh capital, talent and business development efforts, and still become a successful business enterprise.

Here’s how shares of IACI are trading on the news:

IAC/InterActiveCorp. (NASDAQ:IACI): IACI shares recently traded at $45.55, up $0.18, or 0.4%. They have traded in a 52-week range of $28.60 to $47.96. Volume today was 250,818 shares versus a 3-month average volume of 1,005,460 shares. The company’s trailing P/E is 24.65, while trailing earnings are $1.85 per share.

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