Now in Legal Rebels:
Posted Jul 25, 2012 03:38 pm CDT
Bankers have valued the online legal help company LegalZoom at 40 times last year’s earnings, despite competition and potential lawsuits.
Slate says LegalZoom earned $12 million last year after two years of losses and notes the “whopping” valuation for the initial public offering. The story does acknowledge revenue grew by a third last year. “Even annualizing the 43 percent improvement in this year’s first-quarter numbers compared to 2011 means LegalZoom’s valued at 28 times 2012 earnings, at the top of its IPO range,” the story says.
The story also notes competition from private companies such as Rocket Lawyer and recently settled suits claiming unauthorized practice of law. LegalZoom, which offers online legal document services, was co-founded by O.J. Simpson lawyer Robert Shapiro.
According to the Wall Street Journal (sub. req.) and Reuters, Legal Zoom expects its IPO of 8 million shares to be priced between $10 and $12 each. At the higher end, the company is valued at $483 million.