Gobble or be Gobbled
With $50 billion in cash, a number of buyers are looking for growth opportunities, and few areas stoke excitement like online video.
However, does that mean online video startups are about to press the cash register?
Defining Total Return
An investor’s Total Return is equal to income gain plus capital gain.
Income gain refers to the money you generate from operations; capital gain the one-time windfall you generate when you sell the asset. When you invest, the former is the present, the latter the future. This is why some investors sustain losses for years in the hope of the big exit down the road.
With a stock, income gain is the dividends a company pays out whereas capital gain is the difference between what you sell the stock and what you paid for it initially. With startups, profits are elusive and dividends a dream; it’s all about the big exit, be it in an M&A (mergers and acquisitions) or an IPO (initial public offering). With the IPO market all but closed, most investors look for M&A to cash out.
In this article, we will look at:
- The six variables that drive prices in M&A
- The Great Merger Movement
- The various startups competing within the seven segments of online video
- The reasons that companies buy other companies
- The threats against a return of M&A activity in online video
- The likely next step in M&A activity in online video.
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