Wednesday, October 01, 2014

Angie's List Next Step Is To Find Foolish Buyer

Angie's List should be formally declared a Ponzi scheme. It's operated for nearly two decades and has never turned a profit. The end game has always been to swap out one group of duped investors for another to provide cash infusions to keep the company afloat. Most astute stock investors have figured out that the Angie Hicks/Bill Oesterle business model only makes money for themselves and a few company insiders. Now that the company's stock has been in a downward spiral for the past year it should come as no surprise that Hicks and Oesterle would start shopping their company to a buyer. The IBJ, which is owned by one of Angie's List's long-time directors, Mickey Maurer, is all giddy about the company's stock rising on news of a possible sale of the company:
Shares of Angie’s List Inc. rocketed 22 percent higher Tuesday night after The Financial Times reported that the fast-growing consumer-review service had hired investment bankers to explore strategic options, including a sale.
An Angie’s List spokeswoman said the company had no comment because it does not respond to "rumors." The company’s shares surged $1.73 to $7.80 in after-hours trading.
The Financial Times, which did not name its sources, said Angie’s List had held conversations with prospective buyers. However, the newspaper cautioned that the company “is not wedded to selling itself” and might decide not to pursue a deal . . .
The company has been laying off sales staff following its most recent $18 million quarterly loss, and the company has been moving its staff from a series of buildings on East Market near downtown that it bought from a company owned by Oesterle into an office tower on North Meridian. Is there really a company out there that would be foolish enough to buy Angie's List? It makes you wonder just what the hell the business of America is all about when people like Hicks and Oesterle can become multi-millionaires running such a business that should have been shut down years ago due to the massive losses it has accumulated year after year without exception. How any consumer would pay for a membership fee and trust their ratings when the company relies on the vast majority of its revenues from the service providers it supposedly objectively rates is a mystery to me. The company just recently settled a class action lawsuit that accused it of providing misleading information to its members regarding automatic renewal of memberships.


Paul K. Ogden said...

Gary it's not accurate that Angie's List has never turned a profit. It did one quarter. One quarter out of 80 in 20 years.

It makes you wonder how bright some investors are if they buy Angie's List stock.

Anonymous said...

When ANGI is bought and the headquarters relocated, there's going to be some empty properties on the Indy market.

Anonymous said...

Did anyone notice the interest rate on the latest round of financing? Not exactly a vote of confidence in the long-term prospects of this company.

Re: Anon 10:21 AM's comment regarding the empty properties. Look who originally owned all those properties and who conveniently sold those properties to Angie's List! All this at a time when the company is supposedly strapped for cash. Billy Boy made out rather well in that land sale transaction.

Anonymous said...

I think I'm going to consider buy at least a put option or two on this stock.