Size does matter, when going public

The potential exists…

There is room for porn within the public capital market. A wave of industry consolidation would have to take precedence for any meaningful adult industry IPO trend to begin.
According to Francis Koenig, President and CEO of adult-oriented private equity firm Adult Vest, it will take time. Can porn go public(ly Traded)?

Is porn ready for the public market?

Somehow, this big market has failed to reach a critical mass. The top 10 companies in the business own only approximately 10 percent of the market, based on revenue estimates from Hoovers. Only Beate Uhse, and Playboy have revenues of $250 million. Ohmy news

Smaller businesses can go public using the Over-the-Counter (OTC) system, it is a manageable regulatory structure and as a result it lowers compliance costs. The cost of going public by using the Over-the-Counter system can be as low as US$100,000 up front, with an annual fee of tens of thousands of dollars.

IBD is the smallest of the world's publicly traded adult entertainment companies, it deals with processesing payments with US$6.9 million in annual revenues, and a market capitalization of US$2.2 million. OTC is the ideal venue, as IBD does not meet the revenue minimums of most stock exchanges.

While OTC is an option, it will not draw the industry as a whole to public investors, A few big splashes will be necessary to trigger a trend, requiring big companies to go public on exchanges.

The Adult Entertainment Industry may be big, but porn companies are not.

The Industry is dominated by small owner-operated companies,obscuring financial details and stifling growth.

To grow aggressively, the porn industry needs money, but the business has a long way to go before most companies are large enough even to consider IPOs. An Initial Public Offering is also referred to simply as a "public offering," and can be a risky investment.

Companies limit public scrutiny by staying private. Among the large private adult-oriented companies are Vivid Video and Larry Flynt Publishing.

Playboy is one of the oldest and largest public entities but has struggled for years. In the 12 months ended in March, Playboy lost $53 million on revenue of $301 million. With a market capitalization of only $285 million, Playboy sells for 0.9 times its sales.Forbes

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