UPDATED 11:09 EDT / NOVEMBER 02 2010

Skype Calls for IPO in 2011

Skype is coming out with a $1 billion IPO in 2011, contrary to what was much anticipated end-of-this-year announcement, reports Reuters.  About $100 million is expected by the Luxembourg-based internet telephony giant from this initial project offering. Tony Bates, a former senior vice president of Cisco Systems, was declared as Skype’s chief executive in October, and an S-1 statement with the Securities and Exchange Commission was filed.

Skype, having successfully launched Facebook integration earlier, will trade on the Nasdaq Global Market where Goldman Sachs, J.P. Morgan, and Morgan Stanley are among the banks handling the IPO.  As of press time, no price range with regards to the IPO was mentioned nor the exact date when it would be open to the awaiting investors.

However, reports have been made that the range will be from $750 million to $1 billion, with Goldman Sachs leading the effort along with several joint book running managers, including JPMorgan, Morgan Stanley, BofA Merrill Lynch, Barclays Capital and Citigroup. Although other companies such as Yahoo, Microsoft, Google, Apple as well as Verizon Communications Inc and AT&T Inc and Cisco Systems were all considered interested third parties at one point, a resource person said Skype is a natural fit for Comcast because of its already established cable networks.

Last year, in November, a group of investor led by Silver Lake acquired Skype from eBay. The group included the Canada Pension Plan Investment Board.

For Skype, preparation towards an IPO has involved several steps, namely as a way to prove itself.  It’s cleaned up its rlationships with third parties, enforcing its terms of agreement for applications like Nimbuzz, and sought out several partnerships for extended access, including a deal with Facebook.  In other news, Cisco has been ramping up efforts for home-based telecommunications as well.


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