According to the New York Times, Hulu is approaching investment banks to underwrite an IPO this fall valuing the company at $2 billion. What is Hulu? Hulu is an online video service that offers a selection of hit shows, clips, movies, and more at Hulu.com and numerous destination sites online and across four screens â€” PCs, TVs, mobile phones and tablets.
1. Based on Yarrowâ€™s article, draft a simplified income statement for Hulu in 2009. Assume a year-end of December 31.
2. What is an IPO? Why does Atkinson see problems ahead with this?
3. How does Hulu generate revenue? What accounts do you think would be associated with this business model?
Yarrow, J. (2010). Hulu Wants To IPO At A $2 Billion Valuation, Business Insider SAI, August 16. (Retrievable at http://www.businessinsider.com/hulu-ipo-2010-8)
Atkinson, Claire. (2010). Hulu Faces Hurdles to Stock Offering. New York Post, August 17. (Retrievable online at http://www.nypost.com/p/news/business/hulu_faces_hurdles_to_stock_offering_2O1mh3F3PhtbXXbyrQ7QoO)