That's an outright lie. Look at their website, they only do featured research on major companies usu about to IPO (some positive and Buy Rating some Avoid IPO/sell). So far has mostly been right every time (Avoid ZYNGA, Avoid Groupon, FB fair value = $24 not $38). positive on Workday and Palo Alto Networks (both up over 50% since IPO) positive on Twitter, negative on Foursuare. But they're major companies. What article is YOUR admittedly tiny company? That's clearly an outright lie. You're a shill for LivingSocial's PR firms scrambling obviously for anything. So link to this "article/analyst research note" that they would bother doing on what you say is a tiny crappy business. Go ahead, link now. Otherwise, proof you're a liar and being libelous and deserve what you get for anonymously investing this story.
Uh you don't think the most important story from public interest point is what it means for 1,000s of barely getting by local merchants that their place in line in a bankruptcy - which looks more and more likely - since LivingSocial per Fortune says was down to just $28 M before this emergency financing - so end of Feb had $28M + $110M new money so = $138M cash now (but still owed those 1,000s of local merchants within next 30-60 days over $350M) is not the most important part of what's going on at LivingSocial, and that privco was trying to sound the alarm to local merchants and employees that LS doesn't have the cash to pay them in full?? How will merchants survive? (If you've ever had a family member run a restaurant or hair salon, they barely survive week to week. They served the food, they did the haircuts. They're owed their money. They have a right to know whether the company that owes them the money has the money to actually pay them on time or at all, don't they? If not, shouldn't they refuse to honor any more LS vouchers and save themselves? To me who has several family members who are small local business people like this (and yes some have recently run LS deals, thinking that with $850M and amazon name they can count on it coming on time on the 15th or the 20th next month and are timing their paying their bills the moment they receive that LS check. You don't care about that? What exactly is important to you?
Privco exposed the balance sheet on 12/31 in black and white...massive shortfall in money to pay those merchants, massive losses, even worse terms to get final lifeline. And it was all based on math that can't be denied, unless you are a troll for livingsocial PR or have your head up your ass.
I read the PrivCo report and they didn't say who invested in the emergency funding round (except that Amazon did and that some of its other previous investors put up money and participated, some passed and did not). This is the language, which I thought to me was pretty clear:
"According to PrivCo sources, the financing effort was led by LivingSocial's largest outside shareholder, Amazon.com, with participation from some of its major venture capital investors (who had already invested $823,624,695 in equity in LivingSocial - per PrivCo V.C. Funding data - before today's emergency debt financing) in the hopes of salvaging what they can, with strict terms in place to ensure they are first to be paid upon a sale or bankruptcy. (Prior investors in LivingSocial include: Lightspeed Venture Partners, Grotech Ventures, Revolution Ventures, and U.S. Venture Partners; the VC firm confirming today's deal terms preferred not be to named. PrivCo is not suggesting any particular firm named above participated in the new financing.)"
So LivingSocial damage-control CEO's "Talking Points Memo" spin is either because he's confused and mis-read/misunderstood, or more likely is making an "ad hominem" response (that is, try to attack the character of who he's debating, but without addressing the substance of their argument).
And how come all of his details weren't provided to employees Tues or wed. or whenever his email bragging about the round, but then some were only dragged out of him / forced out next day (on liquidation preferences, on being a "down round" (major down round, minimum of 75% by his subtle hint, Reuters citing experts reviewing the docs say implied valuation much lower, maybe as low as the $110M itself.
There are 400 laid off employees from LivingSocial who by next week have to decide to excercise their soon to expire common stock options and write a check for lots of money to livingsocial to buy the commmon stock at whatever strike price their options were at (anywhere from $1b to $2b to $5.7B valuation if granted in past year). One I know asked what she should do (she would have to write a check for "tens of thousands of dollars" to livingsocial to buy LS common stock, which if the valuation is under a Billion (and cmon it obviously is, look at Groupon look at Amazon's own auditors valuation of less than $100M). Now she didn't know what a liquidation preference is, or in this case accurately reported by PrivCo to be more than the 1x liquidation preference but "multple times" the $110M provided (as even CEO - though said nothing about it in Memo 1, fessed up in Memo 2 yes it is a several times liquidation preference, based on finanial metrics, but won't possibly go as high as 4x." Even if it's 3x, that $330M, plus the former $850M preferred raised. What I am going to tell her? And 4,000 employees who are deciding whether to stay or leave based on what their common stock options are worth sticking around for, and being misled by their CEO (again nothing said in Memo 1 at ALL about impact on common - which cmon folks is worthless - and in memo 2 says "ok I admit it, your common stock is diluated - but "not much" - even though we just got funding with multiple x liquidation preferences, we must pay that back plus interest ("dividends") within 4 years, then throwing out we might IPO and then it won't matter. That's Chutzpah to say that with a straight face.
I think PrivCo did those employees a service, those 400 laid off about to write a check for LivingSocial common stock- and would have based on the glowing Memo 1 from the CEO - and now are correctly thinking they probably shouldn't as by any math they would be giving their hard earned savings to LivingSocial for a security (its common stock, not preferred) that is worth zero now. Kudos to PrivCo, we need more whistleblowers, whether co is public or private like here. Praying for the rest of the 4000 employees now tonight.