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Angie's List, Inc. Message Board

  • kurwa2013 kurwa2013 Jul 20, 2013 9:54 AM Flag

    Bad Business or Not, Angie's List is Simply Overvalued

    By Michael Lewis

    Angie's List (NASDAQ: ANGI ) appeals to the buyer beware in all of us. The company has made a business out of reviews you can, supposedly, trust. In late 2011, the company debuted on the public markets and has since rewarded investors with a more than 40% return, all while unable to post a positive bottom line. However, sales growth over that same time has skyrocketed more than 160%. While the business sounds innocent enough, a recent hit piece from Citron Research sent the stock down nearly seven points for the week. The question is: Does the exhaustive research report highlight anything that investors weren't already aware of? Let's take a look and see if Angie's List is a stock you should avoid.

    Citron Research is notorious for issuing scathing reports on a wide array of companies from Chinese mid caps to Intuitive Surgical. Opinions vary on the accuracy and integrity of the short-seller shop, but one cannot deny their influential prose and shocking statistics. As a public business, a Citron slam piece is one of the last things you want to deal with.

    The title of Citron's report on Angie's List leaves nothing to the imagination: Bad Idea + Bad Business = Wall Street Fiction. In the piece, the firm argues that, at best, Angie's is worth $6 per share -- a far cry from today's $23 price point. The synopsis is as following:

    Angie's List has a terrible reputation among its customers, both end users and businesses. Customers have a hard time canceling memberships and question the integrity of the listings. Most listed businesses have an "A" grade, and seemingly anyone can apply for a listing without any due diligence on behalf of Angie's List. Bad Business or Not, Angie's List is Simply Overvalued

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