The rare first quarter profit reported earlier this year by Angie's List now appears to be the product of creative bookkeeping as opposed to a turn-around in the company's two-decade consecutive streak of losing money. Shares of the company traded down more than 20% this morning as investors showed their displeasure at the company's negative second quarter numbers. Despite an 11% increase in year-over revenues, the company reported a loss of $8.3 million for the quarter.
Digging deeper into the numbers, you find the company slashed marketing expenses by nearly 30% or $10 million in an effort to stem losses, but it also saw a $16.9 million or 9% loss in membership revenues as the company now relies upon advertising revenues from the service providers for whom it supposedly provides objectives consumer ratings for nearly 80% of its revenues. It's also noteworthy the company's accounts payable nearly tripled over the same period last year from $5.4 million to $15.2 million. The second quarter losses wiped out the profits reported in the first quarter, leaving the company with a nearly $4 million loss through the first six months of the year.
Indianapolis taxpayers may have dodged a big bullet by not shoveling out tens of millions in new taxpayer subsidies for the Indianapolis-based company's corporate headquarters. Indianapolis City-County Council members delayed action on the plan pushed by Mayor Greg Ballard while it sought more information about the economic development incentives being offered to the company. The company's former CEO, Bill Oesterle, used the excuse of the state's passage of the RFRA law earlier this year as a reason for pulling consideration of the plan off the table after unleashing a team of high-paid lobbyists to cajole council members into approving the economic incentives sought by the company. He exited the company a short time later.
5 comments:
Thanks for this update on a phony company circling the drain in an ever more rapid vortex. It was only a matter of time... a Ponzi scheme is unable to forever last without massive and repeated injections of Marion County taxpayer money. And Oesterle, he of the Bernard Madoff-Type Accounting, thinks he is governor material to be a Steward of our Hoosier tax monies? Laughing Out Loud Big Time on that.
How can Greg Ballard and so many of our City Councilors be so wrong so many times on so many issues??? It boggles the mind that the only substance many in the Council Chamber and on the Twenty-Fifth Floor posses is sheer and complete stupidity rather than real mental acumen.
The fact that this stain of a company and its chief carney pitchman Bill Oesterlee have already stolen millions of dollars from Indiana taxpayers is a testimony to the gullibleness of the average Hoosier who grows up being told what to do and then dutifully spends the rest of his or her life doing it. At some point, we're gonna have to learn to think for ourselves and question authority or we'll be having this same conversation in 2055.
When will people figure out there is no path to profitability for ANGI?
Under no scenario or business plan does this company look like it can turn a profit.
I don't see what optimism 3Q is going to bring, so the shorts might drive this to zero.
Anon 11:22, I would posit that "the people" do know, and have known, there is not profitability for ANGI. It is our idiot Councilors (from A to "ZL") who have yet to figure out that free enterprise is always better than "government-selected enterprises". Always. I am of the opinion corporate welfare whore Angie's List is Indy's version of Marxist Obama's Solyndra scam. Of both, we will never completely determine where the money went.... other than into pockets owned by the corporate special interests many of our Democrap Councilors sure do seem to adore.
Thanks for reporting, Mr. Welsh. You could have knocked me over with a feather with this story!
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