Quote:
Originally Posted by ilnjscb
If only stocks worked that way; when you issue a stock and make statements about its value, you make yourself vulnerable to CA lawsuits if it drops in this fashion. "taking 50m from a bunch of rubes" has consequences, and many of those rubes have lawyers. To properly defend yourself, you'll spend millions. They don't have millions. The real issue is the debt and their S&G. Reduce those and the stock will head up and diminish exposure to this kind of potential liability.
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Correct on the lawsuit. I believe one law firm has already issued an investigation into them (See:
http://suemyadvisor.com/blog/press-r...g-thalmann-131). However, it might be hard to prove. I mean, I did hear Marc Bell go on CNBC and claim they were somehow bigger than Facebook, but according to some metrics he might be bigger than them. Shit, GroupON was inventing fake metrics to market their stock. At the same time, I never heard any crazy comments where they totally misrepresented their stock, in fact there was pretty good coverage from the get go.
But you are all missing my point, and the point is this: Gloating about how their share price is moving downward is a sign that they are going out of business tomorrow, and then basking in that glory because you are certain this is true, is highly inaccurate on your part. Their stock price is totally disconnected, most definitely in the short term, fom their operations. That stock price could go to $.50, and I don't think much would change operationally. These things are more complex than you make them out to be, its not 1 + 1 = 2.
With respect to their debt, I am pretty sure if you take out the one-time charges, AFF still makes plenty of money. They can make even more money cutting their expenses and pulling other defensive, non-growth moves. Marc Bell isn't an idiot, no matter how much you want to hate on him - that is my secondary point. Btw, I am not a judge, I don't give a shit what Marc Bell does. I'm not a fanboy, nor a hater, but one thing he is not, is an idiot.
If you had to ask me, and I am no wizard, the stock is going down for a variety of reasons. One being who the fuck would want to be a shareholder in this from a business perspective, the story isn't that great as you guys know with their debt. The second is, Mary, Jane, Jack, John, and Harry don't want to own a porno stock. Once again, it means little to their operations, except little or no access to future cash from the public market.
Let me draw a chart for you:
Business <-- (controlled by) --> Insiders (Marc Bell) --> (then) Debt Holders --> then Shareholders (last in line).
You can have a fairly healthy business controlled by insiders, with a shitty value proposition for shareholders, especially when it's an adult stock with a not so great story. Once again, citing stock price moving downward and basking in the glory as if they are doomed for bankruptcy, may not be the most accurate depiction of the situation.