Case Name :      Tom.com: Valuation of an Asian Internet Company

Authors :           Larry Wynant, Stephen R. Foerster, Peter Yuan

Source :             Ivey Publishing

Case ID :            900N13

Discipline :        Finance

Case Length :    18 pages

Solution Sample availability : YES

Plagiarism : NO (100% Original work)

The Internet investment craze was starting to catch on in Hong Kong. Tom.com Ltd., a Hong Kong-based Internet company, was planning an initial public offering at the Hong Kong Stock Exchange. A portfolio manager for EuroGlobal Funds was to provide his professional opinion on the value of this investment and its appropriateness for different investors. He was aware of the difficulties in valuing Internet companies and the debate over the choice of valuation methods. Among these, one approach was to analyze the implied hyper-growth rate that Internet companies had to achieve in the next five years to justify their current valuations. He decided to apply this approach to Tom.com.