The financial analysis for Nielsen is still forthcoming, but I have looked a bit more on what the financial blogosphere is saying about it. Â Most sites, such as Motley Fool and the Wall Street Journal, are calling the IPO a poor purchase. Â What I find disappointing is the reasoning behind it.
Nielsen has a terrible business model. Â They use a couple of thousand households to speculate on the viewership habits of millions. Â The last view years has seen them branch out into some tracking of Internet and delayed viewing in their ratings. Â The problem is that tracking Internet or DVR views is trivial. Â Anytime you watch something on ABC, they know. Â Every rewind on that TIVO is tracked. Â Nielsen is no longer providing the useful product it once did.
But who cares?
Let’s say I start a LintMart.  We’re devoted to selling lint.  We have 6 customers.  Each of them pays us a million dollars for each gram of lint we provide them, with a bonus if the lint is  blue.  It’s a terrible business model, but I have customers and I’m making money.  With that kind of profit margin, why wouldn’t you invest?
Now, I’m not saying that Nielsen is selling fluff for a ridiculous amount, I’m just saying that you shouldn’t write it off as a bad investment simply because they have serious going concern problems.
So why should you write it off? Â Michael Corkery on the WSJ says it better than I can: (Link)
“Still, anytime savvy investors – such as KKR, Blackstone and Carlyle Group – are selling out in a volatile stock market — potential investors should be asking themselves why.”