freelancer ipo, page-64

cfoo: "Why is a company with 18m revenue getting 400million dollar offers? Is it just the pure potential for growth?"

Pretty much.

The global market that Freelancer is in is potentially *huge*. If they can be the dominant player long term then there is a tonne of money to be made.

However IMHO it is an extremely risky play right now.

They compete against many companies solely focused on lucrative niches - companies such as DesignCrowd, 99Designs. You should look carefully at the pricing models that DC and 99Designs have chosen vs the lowest-bidder model that Freelancer uses. Consider the impact on margins, the user experience of a site customised for a particular niche, as well as the long term implications of new entrances chipping away category by category.

They also compete against other all-markets players such as oDesk -- which most folks who have used both oDesk & Freelancer seem to say has the better UI.

I don't normally comment on companies I don't hold shares in but IMHO FLN is one that you wanted the pop on (congrats to anyone who got an allocation) but is a crazy investment to get into right now -- it's going to open >$2 which makes it a >$800m cap company with $18m of revenues and barely $0.5m NPAT.

I'd really hate to see small investors burnt on this.

tl;dr:

If you got in at 50c, hold it for a while and see how high it can go due to the tight liquidity.

If you don't already own it, don't get in.