Problem:
An IPO for Skype?
Recently, the online auction giant E-Bay has announced their intention to sell their Skype division through an initial public offering (IPO). Some of you might be familiar with Skype, as they are one of the leaders in providing online video and audio conferencing services. Here is an article on this recent announcement by E-Bay:
https://files.shareholder.com/downloads/ebay/676142613x0x287046/95ba0c30-057d-4a67-859c-8cac8e7be234/EBAY_News_2009_4_14_General.pdf
Then do some reading up on the online IPO process used by Google and Morningstar using the CyberLibrary and internet search engines. This is an untraditional approach to the IPO, but may or may not be the best approach for a Skype IPO. Here is one article to get you started:
Carter, A. (2005, January 10, 2005). Morningstar Follows Google's Lead.
What type of IPO should eBay use to take Skype public - a traditional IPO or an online auction?
Some issues to consider in answering the above question include:
A. The type of investors Skype is likely to attract
B. The lessons learned from Google and Morningstar from their auction IPOs
C. Costs and risks of each type of IPO