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Angie's List, Inc. Message Board

  • davidgolioth10 davidgolioth10 Jul 2, 2014 8:22 AM Flag

    Regarding Angie's LIst

    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.

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