Angie's List Inc. on Wednesday said it suffered a smaller loss in the third quarter, but the online business-rating service's results and outlook fell short of Wall Street expectations.
Shares of the Indianapolis-based company fell 72 cents, or 4.7 percent, to $14.73 each in aftermarket trading after closing at $15.45 Wednesday....
Angie's List lost $13.5 million or 23 cents a share, in the third quarter, compared with a loss of $18.5 million, or 32 cents per share, in the same quarter last year. Revenue rose 56 percent, to $65.5 million.
The number of paid memberships as of Sept. 30 was 2.4 million, compared with 1.7 million a year ago, a rise of 44 percent.
"We added a record number of new members while making significant investments in the business," said CEO Bill Oesterle in a prepared statement.
But the first-year member-renewal rate fell 1 percent, to 75 percent. And operating costs also rose 31 percent, to $78.5 million, on higher expenses.
Angie’s List is the most ridiculous, stupid, misunderstood, negligent, nonsensical, outdated, irresponsible business model in the new web economy. Citron will show the obvious fatal flaws that Wall Street has overlooked,as the analysts cheerlead for a company whose only accomplishment is losing less money than they predicted. New economies give rise to disruptive businesses that are commonly overvalued by the market due to their potential; rarely do they give us a 15-year-old business model that couldn’t make it past a first year business school presentation.
In Part 1 of this expose,we will discuss the structural premise of Angie’s business model that renders it terminal, and can not be ignored by investors. This business model is so obviously flawed and inferior to their competition that we believe it is a story in itself. Part 2 will examine in detail the accounting shenanigans played by Angie’s List to create the illusion of “losing less money” than expected.All of the metrics that support a growth story in Angie’s are skewed to deceive;we will prove that in part 2.
Established in 1995, Angie's List has since has accumulated a deficit of $219 million, while insiders have enriched themselves by selling over $135 million worth of stock since its 2011 IPO debut. All of this is predicated on a business model that does not work, whose revenue is overly dependent on a large phone room,does not and cannot grow virally, and makes zero logical sense. In a bull market, it seems that analysts look at a stock price first, then reverse - engineer a thesis, no matter how preposterous, to explain and justify its valuationIt is the opinion of Citron that the recent runup in stock price in Angie’s List is the worst of Wall Street running amok on its own self-serving hype.