Is a Hulu IPO Under Consideration?
No sooner does Hulu go off the auction block, than speculation begins about Hulu's next move. Laura Martin, an analyst with Neeham & Co., has suggested that Hulu's investors might be considering an initial public offering as a way of raising the capital necessary to continue to build out Hulu's content offerings and compete with Netflix and Amazon in the video streaming battles to come.
The service dropped plans for an IPO last year that envisioned a $2 billion value. By keeping Hulu, the media companies retain control over how shows are distributed online and can use the service to steer viewers to their networks, Fox, NBC and ABC.
“Are the owners willing to fund that themselves, which is a less expensive source of capital but comes with more risk?” Martin said in an interview. “Or will they turn to the public markets, that’s the question.”
Technology and social media IPOs have been one of the few bright spots in the current economic milieu, and it is likely that Hulu could still raise $2 billion dollars in the markets. Rumors suggest that the highest serious bids were in that same range. A successful IPO would more firmly establish Hulu's valuation for a later sale and in the meantime grow a business that has the potential to add a decent bit of coin to the investors' revenues over time.