Goldman Sachs Discusses Earnings, Follow Up Offering From Youku.com (YOKU)

Goldman Sachs has a Neutral rating and a $57 price target on shares of Youku.com Inc. (NYSE: YOKU) following earnings.In a note to clients, Goldman writes, "Youku already has $260 mn net cash; we assume its follow-on offering may boost this to over $500 mn. It could increase the free float to c.40%. The good results do not change our view that it may break even in late2011/12, since it will invest more aggressively in content and bandwidth; it is now making HD its default video setting. Therefore, we materially raise our revenue and cost estimates, assuming faster advertiser adoption of online video, driving a greater increase in advertiser count and revenue per advertiser: our 2011E LPS (loss per ADS) narrows 15% to $0.15; 2012EEPS up 24% to $0.10; 2013E EPS up 13% to $0.56. Rating remains Neutral."Shares of YOKU are up $2.44 to $60.04, a gain of 4% this morning.