Demand Media: We Were Founded In 2006 & We Have Had A Net Loss In Every Year: Total Loss To Date $52 Million
From the S-1 application Demand Media filed today is this little gem, that none of us would be too proud of saying if it was our own business:
“”We were founded in 2006 and have a limited operating history.”
“We have had a net loss in every year since inception.”
“As of June 30, 2010, we had an accumulated deficit of approximately $52 million and we may incur net operating losses in the future.”
“Moreover, we anticipate that our cash flows from operating activities in the near term will not be sufficient to fund our investments in the production of content and the purchase of property and equipment, domain names and other intangible assets and may never be.”
Wow.
Where do I go to buy some of this?
A loss since inception of $52 million and they may never have the cash flow to cover expenses?
Really?
My company Worldwide Media, Inc. has been in the domain business since 1997 and has reported a profit in every year since inception.
Of course we’re are not going public.
What the Hell are we doing wrong?
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There are a number of reasons for floating an IPO.
Here are just a few.
It could be 1, 2 or 3 of these.
1. Add’l working capital.
2. Ability to buy other companies.
3. Ability to buy add’l technology, equipment, etc.
4. Ability to borrow add’l funds. (bonds, stock options, etc)
5. Cash out the VC.
6. Cash out or dilute the major stockholder ownership.
7. Pump and dump.
Your guess is as good as mine.
lol
RL: they probably spent it by buying traffic.
Though Demand Media dominates as content supplier, HostExploits’ expose that ranks Demand Media as ‘the “worst” Internet Service Provider in terms of hosting botnet control servers, Malware distribution, malicious URLs, and high levels of abuse via eNom-registered domains,’ shoots a hole in its worthiness of public offering. The report notes,
“Demand Media has 7,000 active resellers, and many of these resellers exist purely to support a lucrative international drug trade which has moved off the streets and onto the Internet with apparent impunity and eNom has failed to act on the illicit activity within their space.”
according to a recent article published on HostExploit’s website:
Demand Media (eNom) Ploughs Ahead Despite Concerns
Original article:
Cybercrime goes to Wall Street
to clarify, they are profitable – Erick needs to correct his headline. $37M in EBITDA in 2009 and $26M for the first six months of this year. So probably looking at over $50M for 2010.
A Sept. 19 Financial Times article http://www.ft.com/cms/s/2/9d0bd394-c41c-11df-b827-00144feab49a.html states:
“While GoDaddy, the world’s biggest seller of domain names, and other registrars have knocked thousands of rogue pharmacies offline, until now eNom, owned by Demand Media of Santa Monica, had refused to act without a court order or law-enforcement directive.
The changed approach was disclosed in an amended securities filing for Demand Media’s planned initial public stock offering. The filing says LegitScript will assist eNom “in identifying customers who are violating our terms of service by operating online pharmacies in violation of US state or federal law”.”
I don’t know where to find the amended S-1 but would like to check it out if anyone knows where I can find it.