LivingSocial Goes KA-BOOM?

Posted 2013-02-21 10:16
by Karl Denninger
in Company Specific

Oops.... that would be a domino folks, and it's going to spread.

(PrivCo EXCLUSIVE): LIVINGSOCIAL Receives Emergency $110M Debt Infusion From Existing Investors With Oppressive Terms, JUST DAYS FROM BANKRUPTCY, Effectively Handing Over Distressed Co. to Today's Financing Participants...Implied Valuation: JUST $330M, DOWN 94% FROM $5.7 BILLION In Dec. 2011 V.C. Round..

Looks like a convertible-debt deal -- commonly known as "death spiral" financing, and if this report is correct it has basically all of the sorts of characteristics that we saw during the nose-over-toward-ground style deals in the early part of the 2000s.

This one will be a lawn dart, I expect, having shed its wings this morning after exceeding the airframe limits.

Remember what the company said in 2012:

LivingSocial Inc. Chief Executive Tim O'Shaughnessy said the daily-deals company has no immediate plans to file for an initial public offering, citing a flush revenue stream from its coupon business and the lessons learned from other tech IPOs.

Uh huh.

Learned much, you did..... NOT!

H/t Evan.

Update 2/21 4:13 -- There are now questions about the original story that sparked this. One of the problems with private firms is that disclosure is, well, not public. The CEO is obviously*****ed and shot back with a letter that was leaked. The Delaware corporate filing is available at the second link. What is, however, clear is this -- there does appear to have been some sort of cash crunch, companies like this have interesting balance sheets due to the basic business model they're operating on.

View with responses (registration required to post)

Main Navigation

Full-Text Search & Archives

Archive Access

Blogtalk 3:30 CT Mondays

Items To Look At

Discuss The Capital Markets along with daily technical analysis with our Gold Donor program.

Where We Are, Where We're Heading (2013) - The annual 2013 Ticker

Links and Blogroll

Our policy on reciprocal links: Send us an email with your information and why you think your blog or news site would make a good addition - in most cases reciprocal link requests will be granted.

Legal Disclaimer

The content on this site is provided without any warranty, express or implied. All opinions expressed on this site are those of the author and may contain errors or omissions.

NO MATERIAL HERE CONSTITUTES "INVESTMENT ADVICE" NOR IS IT A RECOMMENDATION TO BUY OR SELL ANY FINANCIAL INSTRUMENT, INCLUDING BUT NOT LIMITED TO STOCKS, OPTIONS, BONDS OR FUTURES.

The author may have a position in any company or security mentioned herein. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

Looking for "The Best of Market Ticker"? Check out Ticker Classics.

Visit the forum to discuss this and other investing-related topics; see the FAQ on the forum for information about Gold Donor status including access to our technical analysis video server.

Market charts, when present, used with permission of TD Ameritrade/ThinkOrSwim Inc. Neither TD Ameritrade or ThinkOrSwim have reviewed, approved or disapproved any content herein.

The Market Ticker content may be reproduced or excerpted online for non-commercial purposes provided full attribution is given and the original article source is linked to. Please contact Karl Denninger for reprint permission in other media or for commercial use.

Submissions may be sent "over the transom" to The Editor at any time. To be considered for publication your submission must include full and correct contact information and be related to an economic or political matter of the day. All submissions become the property of The Market Ticker.

Leads on stories of current economic and political interest are always welcome. Our fax tip line is 850-897-9364; please include contact information with your transmission.