Here are some key things to consider -- and which certainly give me pause:
(1) Roughly Only 10% Year-Over-Year Revenue Growth -- that certainly doesn't scream success, set the world on fire, or cause investors to jump and down, especially during a transformative period when mobile video usage via smart phones has exploded; specifically, MobiTV generated $55 million in 2008, $62 million in 2009, $66.8 million in 2010, and is on pace to generate $74 million in 2011;
(2) Losses Growing, Not Shrinking! -- caution Will Robinson, it's red flag time! MobiTV's losses are going in the wrong direction; the company is on a pace to lose $16 million in 2011, after losing $14.7 in 2010 and $14.6 million in 2009;
(3) Still Not Profitable -- see (2) above; to borrow a Latin term from my law school days, res ipsa loquitur;
(4) Extremely Vulnerable -- read my lips here, over 50% of the company's revenues are generated via one customer, Sprint! When you think about it, that is quite astonishing. That's a lot of eggs in one basket (especially when its contract with Sprint reverts to a month-to-month contract in one year); but wait, there's more -- MobiTV's next two largest customers, AT&T and T-Mobile, together account for an additional near 25% of its revenues; in other words, 1+1+1 = 75%+ of the company's annual revenues! Yikes, be afraid ... very afraid!
So, with these daunting numbers, why did MobiTV file to go public now? Listen, here's the deal. Much like Brightcove, MobiTV likely had no other choice in order to raise more capital to cover its continued bleeding. The company is reported to have raised $115 million to date, and it would be challenging -- to say the least -- to find a buyer willing to pay the premium likely necessary to satisfy investor expectations.
In other words, "if not now, when?" was the likely mantra being chanted within MobiTV's board room. Something had to be done.
But, that doesn't mean you need to be part of it.
