Angie's List, Inc. (NASDAQ:ANGI)

Citron Research:
Accumulated deficit $219m while insiders have sold $135m worth of stock since its 2011 IPO. 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. The single most common complaint about Angie’s List from “real people” is that nearly all of its online reviews are “A”’s. Of course they are. Their entire business model is built around a system rigged to assemble and display only “A” reviews.

LarryRicardo red thumbed this and it's plenty good for me.

How does this stock continue to rise? I can't figure out any viable, sustainable business model for this company and yet it has more than doubled since I gave it a thumbs down. Who can tell in this crazy game...

Price to eArnings are far out of wack- only real value is the possible purchase by a shoo, Facebook or other Internet gant looking for addition services to add to their folio

Hard to see how they are going to make money.

citron

free info on Internet

This is what I get for red-thumbing random things while bored.

On that note, surely this stock will come crashing back down to reality...

I actually like this company, but I struggle to justify the valuation. Hard to call when the valuation will cave, but as long as there is positive momentum this should rise. The two catalysts to push it down are an earnings call that shows acceleration slowing. Second is a hiccup in the housing market.

My look on valuation:
Enterprise value: $1.1B
Members: 2M
Value per member (current): $559

Reported market penetration: 6.6%
Market penetration in Indianapolis market (most mature, 10+ years): 20%
Potential total market size: 3x what it currently is

Total member potential: 6.1M
EV / total member potential: $184 per member

Revenue per member in mature markets (pre 2003): $156
Revenue per member in mature markets net of marketing: $114

So if we assume they achieve full market penetration and are able to match their mature market revenue per member, this business still trades at 1.2x that revenue per member and 1.6x revenue net of marketing per member. That just seems a little like a stretch.

Too many competing free review sites. I don't know anyone who would pay for the product.

Why would anyone pay for reviews that can essentially be found online for free? It makes no economic sense.

Overvalued.. Absolutely NO value proposition offered here. What can Angie's list offer over the first google hit you'll get from typing "product/service review". As amazon and google's databases get even more dense from customer reviewed items, Angie is more likely to die.

No competitive moat.

another overvalued company

As I say in my top dog comment, shares will be erratic. Slight wins create huge short position closings and rallies. Share count/volume/short lead to cycles. Never go short a stock that has a 30% short interest, low float, and some ability to surprise, even by a few pennies. (Unless you catch it after one of it's overshoots from short covering). :)

I missed a ride up, I'd best take the elevator back down if I want to hold my spot. Of course a takeoff from here would wipe me off with a downthumb while others rode the green up, but I'll chance it. A reality of a 454 P/B and limited ability to profitize, mixed with competitors who offer free versions, can sometimes be overshadowed by short covering....but not for long.

All a matter of timing on my 14th Angi Call.

Pay for reviews found for free on Google and Yahoo?

It doesn't make sense to me to pay for a service i can get for free and i think other consumers will come to the same conclusion.

Many other online review sites out there that don't charge a fee, pending lawsuits over membership fees.

model is easy to copy
no profit