Not one to miss a party, Playboy Enterprises has decided to bring its Internet division to Wall Street.
Earlier this week, the company filed with regulators to spin off its interactive division, Playboy.com, Inc., in an initial public offering that could reap it some $50 million.
Like founder Hugh Hefner, Playboy.com brings maturity, name recognition and a successful history to the current fraternity house-like frenzy of Internet IPOs. And, like Hef, you just know its going to get lucky.
The Web site www.playboy.com offers free and original content, mirroring
the tone of the magazine. Visitors can view pictorials, receive advice on sex and relationships, and read feature stories on sports, cigars, business and travel.
Playboy's Web division boasts some 100 million page views and 16
million unique visitors in November alone, and Playboy.com ranks as one of
the top 500 Web sites, according to Media Metrix.
Those are tremendous figures for a company that does little to promote its web site, analysts said. But maybe not surprising, given the company�s name recognition.
However, like many Web ventures, Playboy.com does report a bodacious financial downside. The company lost a total of $20.7
million as of the end of September 1999, according to its regulatory filings.
But analysts expect that when the company hits the street, probably in the
first quarter, investors will rise to the occasion, even though it might be hindered from a perception that it's a "sin stock."
Along with Playboy.com, the company owns the Web site www.cyberspice.com, the online version of the Playboy-owned adult cable channel, Spice, as well as a paid service called the Playboy Cyber Club, a Web site offering some 45,000 photos on archive and live chats with Playboy models.
Cyber Club members also get access to all of the magazine�s famous
interviews. Launched in 1997, it reportedly has about 37,000 subscribers,
according to the company�s filings.
Playboy Enterprises Chief Executive Christie Hefner, the 47-year-old daughter of Hugh Hefner, will be chief executive officer and chairman of
Playboy.com.
Robert Routh, a media analyst with Ladenburg Thalmann & Co., regards the IPO as a chance to inject some needed value into Playboy Enterprises. Ladenburg Thalmann & Co., upgraded Playboy Enterprises stock to a "strong buy." Routh said the publishing empire was currently undervalued on Wall Street, and should be trading at around $39 a share.
Routh estimates the company will offer anywhere from 15-to-20 percent of its Internet division to investors, which also may help to change investors� misguided perception that Playboy Enterprises is mainly a magazine publishing business.
It is, in fact, a unique content provider with a wide range of assets, including television, movies, and interactive properties, all of which can be leveraged into a successful Web business.
"It�s a brilliant strategy," Routh said. "They are transitioning themselves
into a company that is more focused on entertainment and electronics."
