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Angie's List shares soar as revenue, customers climb

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Stock in Angie’s List Inc. on Thursday morning rose the most since the Indianapolis-based company's shares began trading almost a year ago.

The shares climbed more than 30 percent, to $11.85 each, in the first 70 minutes of trading Thursday for the biggest intraday gain of its stock since Nov. 17, 2011. Through Wednesday, the stock had lost 44 percent this year.

The stock ended Thursday at $11.56 per share, an increase of 27 percent on the day.

The gains came a day after the company reported sales that beat estimates as more members paid to use the service.

Angie’s List raised $114 million in an initial public offering last November after pricing shares at $13 apiece, the top of the proposed range, and held a secondary offering May 15.

On Wednesday, the company posted a wider loss in the third quarter due to hefty advertising spending, but succeeded in attracting hundreds of thousands of new subscribers to its online business ratings and reviews, boosting revenue by 75 percent.

Angie's List said that its total paid memberships increased 68 percent, to 1.66 million, for the period ended Sept. 30. Paying customers get access to consumer ratings on everything from local plastic surgeons to sewer cleaners. The company's revenue increased 75 percent, to $42 million. However, that gain was partially offset by higher selling and marketing expenses.

Angie's list reported a quarterly loss of $18.5 million, or 32 cents per share, compared with a loss of $17.4 million, or 66 cents per share, in the prior-year period. The larger per-share loss in last year's quarter reflects that the company had fewer shares outstanding before going public last November.

Analysts polled by FactSet expected losses of 33 cents per share and revenue of $41.3 million.

"We look forward to continued growth in the fourth quarter," Bob Millard, Angie's List chief financial officer, said in a prepared statement. "Based on normal seasonal trends, we will scale back on our marketing investment in the fourth quarter."

Marketing expenses in the third quarter grew 39 percent as the Indianapolis-based company continued promoting its website and trying to sell its services. The company reported that 76 percent of first-year customers renewed their membership. Angie's list requires visitors to subscribe to see its A to F ratings on businesses that are submitted by consumers. The annual fees range from $28.50 to $46.

Looking ahead, Angie's List forecast fourth-quarter revenue in the range of $45 million to $46 million, in line with analysts' estimates.

Angie’s List has not posted a profit since founded in 1995 and last year lost $49 million.

Company management and analysts nevertheless have said Angie's List is on track to be profitable by 2014 as it builds critical mass in national markets.

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  • Dogs
    Yeah, sales tax, that'll kill them. Yep, so spot on, can't believe I didn't think of the all mighty sales tax. It's a wonder how Amazon will survive that. Wait, never mind, just thought of 15 ways, no wait, 20.......
  • Another Thing...
    If the Company's insiders really "believe" in this business plan so much then please explain the following: Insider Purchases - Last 6 Months Shares Trans Purchases(5) 345,691 Sales(11) 4,428,050
  • Who let the Dogs out?
    Yeah, I would never invest in Amazon - because it's a dog;when they have to start paying sales tax, it will sink like a rock.
    • Really? and
      Yes, really. I love the ".... this company is a dog...." bit. Yes, horrible dog for me. I am up $2,722 since acquiring. Horrible dog for 3 months. While it has served it's purpose for me, and my investment strategy means I will be leaving, the bit, "it is a dog", is absurd. Do either of you understand that a company can lose money, and investors who invest, can carry it, to profitability? Or do you also think Amazon is a dog for it's more than half a decade of losing money?
      • Scam
        "As previously discussed, the properties are owned by Henry Amalgamated, whose majority owner is Bill Oesterle, our CEO. We are working on the purchase and sale agreement and anticipate the transaction will close in the fourth quarter." Look at this one...we can't make a profit, so it would be a great business decision to acquire spend $6.5 MILLION on a building that our CEO is selling to us. Watch Billy Boy run from this one when the "excrement hits the ceiling fan"....
      • ANGI
        Member Growth (aka revenue growth)????? How can anyone believe total membership grew when ANGI has no idea how many "members" it has. The class action lawsuit (undisclosed by ANGI to its investors or by THINK EQUITY their financers and was filed over 2 1/2 months ago) brings to light an interesting dilema. 1) How does anyone (let alone ANGI) determine who is a member and who is someone who is being auto renewed and has no idea they are members? The lawsuit states that for at least 5 years the company would not offer the members a way to stop auto renewals and would routinely increase the rates (sometimes doubling!). This alone is fraud. 2) If a company commits fraud over the past 5 years and goes public knowing it was commiting this fraud: a) Does a stockholder or interested buyer need to know about the fraud? b) If ANGI can not honestly tell you how many members it actually has, would that make it virtually impossible to determine a stock's value? 3) How can THINKEQUITY give it a "desk pounding" critique when the news of the Indianapolis filed Class Action Lawsuit was exposed by the Tech Sector Financial outfit - Seeking Alpha the day before it critique (and the Indianapolis Star broke the story on October 9th)? Does THINK EQUITY not have the resources available to see if there is a class action lawsuit filed 2 months previous against a stock they are heavily financing. How can they tell investors that the stock will double? SEC Involvement necessary?????
      • Really?
        Are these the same analysts that told us collateralized mortgage obligations were sound investments and warranted AAA bond ratings? Do your research, or better yet, use some common sense and you may realize this company is a dog, all on your own.
      • Analysts
        You mean analysts understand the PREMISE of the strategy better than the average person. This company won't be around in a few years however, as the premise AND model are fundamentally broken.
        • Pull the strings...
          The analysts understand the company better than you do. This model is one that requires investment to build a revenue base. Once the base exists, the growth can slow and the expenses decline. There is a lag in revenue from investment and the necessary decline in investment is on the horizon.
          • Numbers are tricky
            I always find it interesting to compare stock market losses to gains. It seems like a 44% loss through Wednesday followed by a 30% gain on Thursday would equal a 14% loss for the year. But it actually equates to a 27.2% loss for the year. This is just for those who are as challenged at math as I.
          • Something Isn't Right
            This is crazy. I could just imagine if I went to a friend and asked for an investment into my company that has never posted a profit in 17 years. He would probably laugh it off. So how and why do these shareholders and future shareholders have any interest in this company? Something just does not make sense.
            • Fraud
              How does a company stay in business when,"The company, which provides reviews of plumbers, electricians and other service providers, hasn’t turned an annual profit since it was founded 17 years ago. It reported a net loss of $43.2 million in the nine months ended Sept. 30, 2011, more than the $19 million loss during the same period in 2010." If my business reports losses for more than 3yrs it's a hobby.

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            1. PJ - Mall operators like Simon, and most developers/ land owners, establish individual legal entities for each property to avoid having a problem location sink the ship, or simply structure the note to exclude anything but the property acting as collateral. Usually both. The big banks that lend are big boys that know the risks and aren't mad at Simon for forking over the deed and walking away.

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