Citron challenges any reader to identify any publicly traded company that has lost money for 18 years in a row and is trading at an all time high valuation. Are they curing cancer? Are they solving the world’s energy problems? No … they are referring a plumber to you.
Angie's List (NASDAQ:ANGI) has become a poster child for valuations disconnected from reality, and failed businesses supported by other people’s money. We ask you this: If Tesla were to lose money for the next 10 years would it be trading here? If on it's 20th birthday Angie's was blessed with a miracle and found a way to earn a legitimate $20 million profit … what is the company worth then? $3 a share?
Citron had a challenge in framing up its “part II” coverage of Angie’s List. We promised a detailed analysis of some troubling accounting issues. But as we compiled that story, we kept running into the most outrageous red flags, including outright lies being told by the company in plain sight that border on fraud upon their own user base.
Stuffing all these points into one story just seemed overloaded, so today Citron publishes TWO stories on ANGI’s list. One is just for you beancounters, who think you have an economic rationale to be long Angie’s regardless of any business model concerns, as long as the numbers add up to a profitable future. And the other one is for everyone else, shedding some much-needed light on just how detached from reality this company has become from being a real business and a real investment, as it spins itself toward irrelevancy to the unceasing drumbeat of insider sales.
For the analysts and beancounters:
And for anyone with a shred of common sense :
(As always, Citron recommends downloading the PDF's locally, and clicking on the links for the sources.)