Vice Media Takes A Look At The Landscape, Considers IPO

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Vice Media, a company that started as a punk rock magazine in Montreal in 1994, could raise nearly $29 billion in an initial public offering, valuing the media company in the same range as Twitter Inc (NYSE:TWTR).

The company, with anticipated 2014 revenue of $500 million according to the Wall Street Journal, is expected revenue double and see profit margins widen from 34% to 50%, company founder Shane Smith, 44, said in a Bloomberg TV interview.

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Aggressive journalism

The closely held New York company produces an aggressive brand of journalism that attracts a hard-to-reach young, male audience desired by advertisers.  The young, often tattoo-laden reporters file stories from danger zones around the world that often break traditional journalistic guidelines and are sometimes laced with profanity.

The company supplies content through both online portals it owns and traditional media outlets such as Time Warner Inc (NYSE:TWX)’s HBO and Viacom, Inc. (NASDAQ:VIA)’s MTV.  One episode of “The Vice Guide to Everything” features reporters sneaking into North Korea as tourists and spending time with a Russian mobster.  Vice Media also has their own properties.  Their YouTube channel, for instance, boasts 4.4 million subscribers.

High profile media attention

The company is a darling and has attracted the attention of Rupurt Murdock, according to a report in Ad Age. The media mogul’s 21st Centrury Fox unit acquitted a 5% stake in the firm for $70 million after Murdock and Smith had drinks in a Brooklyn bar.  The value of that stock, according to a Fox regulator filing, is now at $1.4 billion.  Other media players with board seats include MTV founder and former Viacom, Inc. (NASDAQ:VIA) CEO Tom Freston, and the advertising agency WPP, the report noted.

Vice Media considering cable channel

Vice Media, with 35 offices around the world, is producing so much TV programming that Smith said he is considering starting or buying a cable channel. “We are looking at various opportunities because there is such a destratification going on in media right now,” he was quoted as saying in the report. “We can look at buying distressed media assets and then see if we can’t turn them around.”

As the stock market is becoming loaded with IPOs of firms with questionable valuations, Smith is frank about his goals. “We’d be stupid not to test what the market would bear,” he said. “There’s a lot of money sloshing around in the system, obviously valuations are high.”

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Mark Melin is an alternative investment practitioner whose specialty is recognizing a trading program’s strategy and mapping it to a market environment and performance driver. He provides analysis of managed futures investment performance and commentary regarding related managed futures market environment. A portfolio and industry consultant, he was an adjunct instructor in managed futures at Northwestern University / Chicago and has written or edited three books, including High Performance Managed Futures (Wiley 2010) and The Chicago Board of Trade’s Handbook of Futures and Options (McGraw-Hill 2008). Mark was director of the managed futures division at Alaron Trading until they were acquired by Peregrine Financial Group in 2009, where he was a registered associated person (National Futures Association NFA ID#: 0348336). Mark has also worked as a Commodity Trading Advisor himself, trading a short volatility options portfolio across the yield curve, and was an independent consultant to various broker dealers and futures exchanges, including OneChicago, the single stock futures exchange, and the Chicago Board of Trade. He is also Editor, Opalesque Futures Intelligence and Editor, Opalesque Futures Strategies. - Contact: Mmelin(at)valuewalk.com