Just one week after Yandex stock plummeted on the NASDAQ, Mail.ru Group capitalization hit a record low yesterday on the LSE, falling by 15.1% to $24.5 per share – below the company’s IPO offer price of $27.7 per share one year ago.
Most stock indexes fell yesterday – FTSE 100 by 2.6% and Russian stock exchange RTS by 5.2% – fuelled by fears of a Greek default and a looming depression in the eurozone. Until last month, however, Mail.ru Group held up against the stock exchange meltdown relatively well, even though other high tech companies – including Mail.ru Group’s rival Yandex – were falling.
Mail.ru stock stock hit historic low (source: Bloomberg)
A key specific cause for Mail.ru Group’s troubles on the stock exchange may have been the recent valuation reassessment of Groupon, Facebook and Zynga, reminded Alfa Bank analyst Yulii Matevosov in an exchange with Russian business daily Vedomosti. Mail.ru Group owns 5.13%, 2.4% and 1.4% in these top international web properties respectively. Groupon, in particular, might need to drop its valuation to as low as $3 billion to $5 billion to attract investors when the company will go public – down from a questionably high $25 billion previously discussed –, Bloomberg reported earlier this week.
Just two weeks ago, Mail.ru Group co-founder Yury Milner sold 1.7 million shares – or 0.8% of the group – for $35 each, raising a total of $59.5 million in the share sale.
A top Russian Internet holding, Mail.ru Group owns controlling stakes in two of the three largest Russian language social networks – MoiMir and Odnoklassniki.ru – in addition to its 40% stake in Vkontakte. The group also operates Mail.Ru, Russia’s leading Internet portal and e-mail service, as well as Mail.Ru Agent and ICQ, the two largest IM networks in Russia, the latter acquired from AOL in 2010. The holding also owns a range of online games and e-commerce sites and has a 21.35% stake in payment terminal operator Qiwi.
In 2010, the group’s gross revenues amounted to $324 million.
