Virgin Mobile USA wants US$100m for first time to market
Rating: good timing
By Annie Turner
Rumours of an initial public offering (IPO) by Virgin USA has been rife
since its youth-orientated services in 2002. This joint venture between the
UK’s multi-millionaire Richard Branson and the US own Sprint Nextel has
almost 5m customers and about 15% of the US pre-pay market. Now they plan to
raise US$100m from an initial flotation.
Initially the US market seemed somewhat stunned by the cheeky advertising
and radical new marketing strategies, such as Sugar Mama (see this month’s
Mobile Advertising and Marketing Analyst at www.bkimedia.com
for a detailed report on the ad-funded free
minutes and texts), but they got over it. Now there’s a whole posse of them
on Virgin’s trail, so this is a good time to cash in and reduce debt.
According to the Financial Times today, last year the company reported a net
loss of US$36.7m on revenues of US1.1bn, down from a net loss of US$102.9m
the previous year. Apparently Virgin Mobile USA is going to use the net
proceeds to pay off debts and borrow more.
At least the company hasn¹t been bought out by a larger, much less funky
organisation yet and no doubt will continue to blaze a trial in creative
marketing and revenue streams.
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