PrivCoTeam

13 ปีที่แล้วdiscuss

PrivCo had a full 45 minute phone call with LivingSocial's OFFICIAL SPOKESMAN to fact check data and also get new facts he offered up about the financing round. That was at 4:30pm Thursday. At 6pm Thursday he received the draft report (as he was eagerly expecting) so he could reply suggesting anything factually wrong, and if he wish provide an official statement which PrivCo would include verbatim. NONE were returned to PrivCo. We emailed again at 7pm, no response. Shortly after 10pm ET when our staff finally couldn't stay any later, we published. (FYI most news organizations refuse and NEVER send actual drafts to the subject companies to "mark up". So PrivCo went above and beyond the call of duty.

PrivCoTeam

13 ปีที่แล้วdiscuss

CNN/Fortune story just updated again to say insiders confirm that LivingSocial was down to JUST $28M IN CASH in February right before taking yesterday's financing.

Do the math: looking at their 2012 financials on PrivCo: http://www.privco.com/livingsocial-receives-emergency-110m-c...

That is, LivingSocial's operating expenses are about $1.4 Billion/year (Revenue + Operating loss = about $1.4 Billion they spend a year). That's $120 Million a month of expenses. $4 million a day. MEANING NEW FORTUNE/CNN UPDATE to their story confirms LIVINGSOCIAL WAS DOWN TO JUST 7 DAYS OF CASH! How is that NOT the very definition of a "distressed financing" situation? Correct the record CNN and Fortune - shame on you - and admit when you're wrong - (and by the way they just deleted this posting from the article comments). LivingSocial was down to a dangerously low level of cash just as PrivCo's sources confirmed, only a week, maybe 2, left, before paychecks would start bouncing and the whole house of cards came down. This is the very definition of a "distressed financing."

PrivCoTeam

13 ปีที่แล้วdiscuss

Wait, they were down to JUST $28M IN CASH in February right before taking yesterday's financing? If my math is right, looking at their 2012 financials on PrivCo:

Their operating expenses are about $1.4 Billion/year (Revenue + Operating loss = about $1.4 Billion they spend a year). That's $120 Million a month. $4 million a day. THEY WERE DOWN TO JUST 7 DAYS OF CASH! How is that NOT the very definition of a "distressed financing" situation? Correct the record Primack and admit when you're wrong - there's no shame in that - that you were a bit hasty at first, but yes they were down to a dangerously low level of cash and regardless of the financing terms or structured as technically debt or technically equity, that yes this was a distressed financing situation.

PrivCoTeam

13 ปีที่แล้วdiscuss

Fortune just reported that insider's confirm LivingSocial was down to JUST $28M IN CASH in February right before taking yesterday's financing? If my math is right, looking at their 2012 financials on PrivCo: http://www.privco.com/livingsocial-receives-emergency-110m-c...

Their operating expenses are about $1.4 Billion/year (Revenue + Operating loss = about $1.4 Billion they spend a year). That's $120 Million a month. $4 million a day. THEY WERE DOWN TO JUST 7 DAYS OF CASH! How is that NOT the very definition of a "distressed financing" situation? T

hey were down to a dangerously low level of cash and regardless of the financing terms or structured as technically debt or technically equity, that yes this was a distressed financing situation.

PrivCoTeam

13 ปีที่แล้วdiscuss

PrivCo has absolutely NO short positions in any private company we cover. These are PRIVATE companies and with rare exception do not trade. Nor do we earn any fees from private companies we cover (and we do NOT accept paid advertising, unless you count a the standard Google links).

We have no agenda other than to try and publish facts, and what LivingSocial announced yesterday immediately struck us as misleading and fishy based on everything we knew about the company and it's dire financials. The press release and memo to employees (imagine you are one of those trusting hardworking employees, or a local daily deals merchant they owe money to "soon") - over $300 Million worth actually, but have only $76 million - made it seem as if the company was doing so well financially that their happy investors who had invested at a $5.7 Billion valuation wanted to double down on their investments and bet even bigger. NOTHING WAS FURTHER FROM THE TRUTH. The company was NOT doing fine, lost over $400 Million last year, was running low on cash, and had to take a massive valuation haircut and grant all sorts of special preferences in order to get this last lifeline of cash.

Their financials can't be papered over...and they verified to the penny as public Amazon.com owns 31% now of the company. Look them up...if you know anything about finance or accounting you will reach the same conclusions as PrivCo did. LivingSocial will soon require mass layoffs, and will be insolvent or sold for pennies on the dollar by the end of this year is our prediction. (And we hope we're wrong, and don't make a dime either way, as we don't want to see 4,000 trusting employees lose their jobs).

But the numbers don't lie and we stick by our prediction.

The PrivCo Team www.privco.com