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Peridot Capital Management LLC

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Based in Seattle, WA
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Peridot Capital Management LLC

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Is an IPO in MySpace's Future?

July 12, 2006 Chad Brand, Peridot Capital Management LLC
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I was shocked to hear that MySpace.com was the most visited U.S. web site last week. I am well aware of the site's popularity (and even have an account on the site), but still, finishing ahead of Yahoo! Mail and Google Search is pretty darn impressive. It appears that News Corporation (NWS-A) got the deal of the year when it purchased MySpace for $580 million in 2005.Should investors go out and buy News Corp stock at $19 per share? Maybe. The only problem with that idea is that NWS has a market cap of $60 billion, so MySpace still is only a small fraction of its business. How much is MySpace worth? I really don't know, but it would not shock me in the least if it could get a $5-$10 billion market value on the public market.

If I were running News Corp, I would probably strongly consider spinning it out in an IPO to monetize the asset and boost shareholder value, especially since the site is really coming into its own right now. Will an IPO happen? I haven't heard anyone mention the idea yet, but would not be surprised if we do soon. Meanwhile, kudos to Rupert Murdoch for such a great move.

In tech and telecom
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Peridot Capital Management LLC is a registered investment advisor in the states of Maryland, Texas, and Washington. The firm may not transact business in states where it is not registered or exempted from registration. In most states, the firm is exempt from registration if it has fewer than six clients who are residents of that state. As a result, Peridot Capital Management LLC is free to provide services to residents of every state and applies for registration as required. Individualized responses to persons that involve either the effecting of transactions in securities, or the rendering of personalized investment advice for compensation, will not be made without registration or exemption.

The content published on our blog represents the opinions of Mr. Brand and he and/or his clients may hold positions in securities discussed. Such positions will be disclosed at the time of publication, although subsequent changes to those positions will be made without notification. The information contained in blog posts is believed to be accurate when published, however, mistakes could be made. As a result, do not rely on the content exclusively for your investment due diligence. The commentaries published do not constitute investment advice, as readers’ personal investment goals and risk tolerances will dictate which investments are appropriate for them. Our blog is meant to be one of many sources for readers to conduct their own research into specific investments. Consult an investment professional before acting solely on information found on this site. If you do not have an investment professional to work with, you may contact Peridot Capital Management LLC directly.