I live in Indianapolis the home town of Angie's List. I am a contractor and currently we receive 95% of our new work from Angie's List, but more importantly, we are one of 15 companies that work with them on a daily basis on implementing their current and new software tools.
I have read many of the post and specifically would like to address a few of these short postings.
On paper Angie’s List looks like a great shorting opportunity. With that being said, I would be careful shorting this stock for the following reasons:
Angie’s List on paper is losing money. The reason is that they are investing in expansion and advertisements. They are burning through cash because they are experimenting with finding the right service product that the consumers want. I would say there business model resembles Amazon. In the past Amazon has put nearly 100% of its profits into expansion. This is basically what Angie’s List is doing. Angie’s list is losing money because it wants to grow and it has always increased its paying membership by at least 30% every year for the last 10 years. Once the business model is perfected, it cut its advertising budget and stops spending money on development software, it will start to realize a profit.
The main reason I would not short Angie’s List is because they will eventually become profitable and the stock price will go up or be bought out by a larger player, such as Yelp, Google or Amazon.
I hate to say it but I told you so. Not only will the short squeeze push this company up to $9-$10 per share.
Angie's List will be sold for above $10.
Next one or two quarters they are going to improve earnings due to cutting back R&D on the E commerce, sales force associated with E commerce and expansion cost of purchasing new buildings, all of these have cut into their earnings.
Either a company like Google, Yelp, or Amazon will buy them out. If more than one of these companies are interested you might be looking at a $12-15 sale price.
Sentiment: Strong Buy
Let's see....should I buy this because you claim that it's going to be the next Amazon in fifty years or should I do what the insiders running the company are doing. They have been selling all their shares for the last two years. Hmmmm. What to do?
I'm not too sure at what price you bought in. I assume you got in before July 2nd. That's why I would like to congratulate you on behalf of everyone in this board on becoming an official bagholder of AL. We are looking forward to seeing more people like you to hand our bags to. Well done brother.
Sentiment: Strong Sell
Are you smoking something? Comparing Angie's List to Amazon? AL has been in business for twenty years, how many more years do these jokers need to figure out a profitable business model? I looked at your posts and noticed that you're a stock pumper and not a businessman.