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LookSmart, Ltd. Message Board

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  • equityval equityval Jan 11, 2013 11:36 AM Flag

    Tender Offer

    Well, they didn't bid for the whole company at $1, just a fraction of it. It is also trading for just slightly under the cash on the books at 12/31 as disclosed in the 8K. The business has been bleeding about $600K of cash a month for the last year, so it probably trading right around the cash on the books today. The company just told you that the network busines is melting down, so unless they can cut a lot of costs, the cash burn is probably going up. Hopefully PEEK will do a better job controlling costs than the ersatz Charles de Gaulle we had running the business before, but you can't blame investors if they wanted to see some actual evidence of that before crediting the stock for it. It is also not really clear that the current business has any intrinsic value notwithstanding the bright and rosy future that RDF-addled seekingthetruth insists is just around the corner. Clients are leaving, employees are leaving, the business has not been profitable for 5 years. It is now the cash on the balance sheet, less whatever the shutdown liabilities are plus whatever can be made of the NOLs, assuming they act quick enough to stop the bleeding - not a slam dunk.

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    • ##... The company just told you that the network business is melting down, so unless they can cut a lot of costs, the cash burn is probably going up...##

      When you refer to "the network business", is it clear in your mind that you fully understand and mean Looksmart's own ad network or, the (so called), "intermediary business"?

      This is part of the business that I have said for such a long time now - Had to go!

      So as Looksmart could become totally independent (neutral) in conducting it's prime objective, the (global) "Distribution Network business".

      equityval ..... You do know the difference, I assume? (As few do.)

    • ##......... It is also not really clear that the current business has any intrinsic value notwithstanding the bright and rosy future that RDF-addled seekingthetruth insists is just around the corner. ..##

      Hi equityval ....

      In your post it seems (to me) that your reliance on and your complete faith in all that was disclosed within the 8K - has now suddenly become believable.

      Why is this so?

      As it certainly flies in the face of all that has been told to shareholders (and the market), and that has been Filed for SEC corporate governance - over the past 7 or, so years.

      In my recent instapost [Looksmart's CEO To Step Down - Filing States Deteriorating Health Condition] specifically, in reply to Ben Plomion (VP Marketing & Partnerships @chango), I had suggested that:

      "In the interest of transparency for both buyers and sellers (and way, less "BS"), it is now about time for ALL to 'show and tell', surely?"

      And that ..."From today's Filing (it appears?), we still have a long way to go."

      It's clear that I had felt it to be a load of ( pakapoo ticket-like) BS

      Re; The Co's (addled) Resource Description Framework (RDF)

      Again equityval ,,,, Why has it that (now), it all suddenly becomes a situation where the Co is stating it's true position? ...... Yet shareholders should now accept that all company statements over the past 7 or, so years, were simply (I'll use Oerhomonos comparison), Enron-like?

      If this is the case (it wouldn't be hard to prove), shouldn't Looksmart's retiring CEO Mr Dexmier now be thinking of packing his bag for a holiday room along-side Bernard L. Madoff?

      • 3 Replies to seekingthetruth935
      • Hi Rossco, I just read the announcement and in my opinion they are toast. They left it too long for Peek to come in and take over the business. A few employees got wind that things were'nt going so well and the trickle of departures became a waterfall. The comment on source code is the biggest worry, I have seen this happen to a company first hand. What it means is they have no way of selling the software because the base code (foundation code) is not know or understood by anyone expect the original software engineers. I think this was a massive mistake for Peek, because now they are left holding the baby, and it's worth less than what they paid for it. This is a classic case of blood sucking managers milking the company for all it's worth. Sorry it has turned out this way mate, they should lock up the last 3 CEO's in my humble opinion.

      • Seeking,

        Yes I was referring to the ad network.

        As to the credibility of the 8-K, I suspect that the headcount numbers are accurate (not easy to fudge given that you have to report payroll to the IRS), and the cash numbers are likely to be accurate (generally, only Chinese companies fake their cash positions).

        The behavior of Dexheimer and the people heading for the exits is consistent with that you would expect with regime change imposed from the outside. My guess is you will see PEEK cut spending dramatically (and probably shut down the ad network) and therefore lay off a lot of Jean Yves buddies that he brought in to the company. He decided not to stick around for that funeral and jumped ship and so did the people that he brought into the company once they saw their sponsor head for the exits. It is quite possible PEEK will lay off everyone and use the shell and cash to get into a completely different business. That would be one of the options I would consider if I were in their shoes.

        I view what went on at LOOK as garden variety incompetence rather than an Enron style looting. If they were trying to loot something and siphon off the cash, there were far better targets to go after. I think Dexheimer's ego overwhelmed whatever judgment he has with respect to the effort to pursue the ad network business. I also suspect the board didn't want to sell at a small premium to cash (which was probably the best offer they received) and would rather just muddle through bleeding cash slowly rather than getting sued for a deal that appeared to not do much for shareholders. As you saw in this tender offer, they took the most passive path possible.

      • equityval is quite correct. Seeking is trumpeting the same old story that makes zero logical sense as always. The last release from the company is crystal clear and for once, accurate. The CEO came clean and told it as it is. The employees that left were key to the business and a very painful loss. They left because the business had no future. That's not speculation. It's absolute fact. The 22 [probably less now] that remain were in relatively junior positions and are perhaps those that can't easily walk into other jobs. LOOK simply won't replace those key individuals that left.

        Another big one that Seeking just doesn't seem to grasp is that there was never any magical open marketplace. Looksmart was all about search arbitrage. They made money serving arbitage businesses that bought cheap clicks from Looksmart and resold them to Yahoo. It's in the release - read it again if you need to. There is very little value in that position and all the more remarkable that the departing CEO would mention this fact in the last release. They had always been very careful not to admit to this reality, if only because Yahoo hate Looksmart with a passion and will not allow their partners to touch Looksmart traffic. There is effectively no business outside of this handful [and I mean handful] of arbitrage businesses. No-one else was interested in buying Looksmart traffic as it's simply not good enough quality to offer decent ROI. As a network that aggregates traffic from other tier2 bit players it was also plagued with fraud. Also as alluded to in the release, the core technology platform is on the verge of collapse. It was developed for Microsoft nearly a decade ago. It's no longer fit for purpose and the company can't rebuild it [no-one left to do it] or reliably support it. As it was core to the business it's fairly clear to see why there is really nothing left. It's sad but true. This is not an investment in a business with any kind of future.

 
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