Angie's List (ANGI) CEO Oesterle Defends Against Citron Article; Says No Scheme in Place
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Angie's List, Inc. (Nasdaq: ANGI) shares are ticking higher following positive commentary from co-founder and CEO William Oesterle to Reuters on Thursday. The executive was responding to negative comments in a recent Citron Research piece.
Oesterle noted that a recovery in the U.S. market could help Angie's List to post its first profit in 2014. He noted that 2013 was a year of transition and the most important factor is cash flow. After cutting marketing costs, the company posted its first positive cash flow with its latest earnings report. It reported spending just $72 for every paid member of its website, versus $82 in the same period last year.
Cash-in-hand has been a concern for investors, notes Reuters. With its latest report, the number was about half of when it came public in November 2011.
One of the other criticisms is that Angie's List has a system that provides for only 'AA'-rated companies, the highest out of six possible going all the way down to 'F'. The company doesn't charge a membership to start, but then begins charging when a number of members and businesses reviewed in a certain area rises. The company also derives most of its revenue from ad sales and only 'A' or 'B'-rated companies are allowed to advertise on the site.
Oesterle said that Angie's List has about 2 million companies rated, but only 300,000 are eligible to advertise due to overall grade and number of reports.
Angie's List competes with Yelp (Nasdaq: YELP) and HomeAdvisor. Shares are up about 2.7 percent Thursday.
For the Citron report, click here.
Oesterle noted that a recovery in the U.S. market could help Angie's List to post its first profit in 2014. He noted that 2013 was a year of transition and the most important factor is cash flow. After cutting marketing costs, the company posted its first positive cash flow with its latest earnings report. It reported spending just $72 for every paid member of its website, versus $82 in the same period last year.
Cash-in-hand has been a concern for investors, notes Reuters. With its latest report, the number was about half of when it came public in November 2011.
One of the other criticisms is that Angie's List has a system that provides for only 'AA'-rated companies, the highest out of six possible going all the way down to 'F'. The company doesn't charge a membership to start, but then begins charging when a number of members and businesses reviewed in a certain area rises. The company also derives most of its revenue from ad sales and only 'A' or 'B'-rated companies are allowed to advertise on the site.
Oesterle said that Angie's List has about 2 million companies rated, but only 300,000 are eligible to advertise due to overall grade and number of reports.
Angie's List competes with Yelp (Nasdaq: YELP) and HomeAdvisor. Shares are up about 2.7 percent Thursday.
For the Citron report, click here.
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