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Author Topic: Prosper Files 10-Q for Q1-2014  (Read 14388 times)

Xenon481

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Prosper Files 10-Q for Q1-2014
« on: May 14, 2014, 09:16:41 pm »

http://www.sec.gov/Archives/edgar/data/1416265/000114036114020960/form10q.htm

Q2 2009 - Loss before other income: $2,617,400
Q3 2009 - Loss before other income: $2,289,092
Q4 2009 - Loss before other income: $2,868,908
Q1 2010 - Loss before other income: $2,747,524
Q2 2010 - Loss before other income: $2,787,434
Q3 2010 - Loss before other income: $2,404,217
Q4 2010 - Loss before other income: $2,566,804
Q1 2011 - Loss before other income: $3,097,283
Q2 2011 - Loss before other income: $2,837,560
Q3 2011 - Loss before other income: $2,837,290
Q4 2011 - Loss before other income: $3,519,037
Q1 2012 - Loss before other income: $4,690,488
Q2 2012 - Loss before other income: $3,545,603
Q3 2012 - Loss before other income: $4,448,773
Q4 2012 - Loss before other income: $4,764,596
Q1 2013 - Loss before other income: $4,516,630
Q2 2013 - Loss before other income: $16,175,000 * and **
Q3 2013 - Loss before other income: $5,375,000
Q4 2013 - Loss before other income: $3,146,000
Q1 2014 - Loss before other income: $2,465,000

* = Prosper recorded the entire $10million settlement cost in Q2 of 2013.
** = Prospers Q2 2013 quarterly operating loss (not counting the $10million settlement) is $6,175,000.

- Q1-2014 is Prospers lowest quarterly loss since Q3-2010.
- As of 3-31-2014, Prosper had "Cash and cash equivalents" of ~$13million before making any payments to the Class Action Settlement. (Note, this is before the latest round of VC funding)
- Prosper spent ~$3.9million in "Compensation and benefits". This is 55% higher than in Q1-2013.
- Prosper spent ~$6million on "Marketing and Advertising". This is ~4x the amount spent in Q1-2013 and puts them on pace to be ~60% higher than total in 2013.
- "Professional Services" spending is down by ~$0.5million compared to Q1-2013, likely due to decreased lawyer fees as the Class Action Settlement takes less resources than actively fighting.
- "Facilities and Maintenance" costs are up by ~43% compared to Q1-2013.

cubbiesnextyr

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Re: Prosper Files 10-Q for Q1-2014
« Reply #1 on: May 15, 2014, 10:53:04 am »

Total losses = $79,699,639
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NewHorizon

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Re: Prosper Files 10-Q for Q1-2014
« Reply #2 on: May 15, 2014, 11:31:50 am »

Well just based on Xenons post, taking a quarterly loss this last quarter looks like a deliberate decision as opposed to, say, the Q2 2013 loss foisted upon them.
The Q1 2014 bottom line could easily have been made green if they cut back, for example, on Marketing expenses.

So maybe the thinking is that ya gotta dig yourself a hole to find the gold.   ;)

ETA: ... a really BIG hole!   ;D
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Xenon481

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Re: Prosper Files 10-Q for Q1-2014
« Reply #3 on: May 15, 2014, 03:02:13 pm »

Total losses = $79,699,639

Thats just since SEC registration and doesnt include losses incurred in the many years before that.

cubbiesnextyr

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Re: Prosper Files 10-Q for Q1-2014
« Reply #4 on: May 15, 2014, 03:59:14 pm »

Total losses = $79,699,639

Thats just since SEC registration and doesnt include losses incurred in the many years before that.

Valid point. 
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bamalucky

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Re: Prosper Files 10-Q for Q1-2014
« Reply #5 on: May 15, 2014, 07:30:56 pm »

Is there any way to see what the total of late & defaulted loans are up to?
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Capital_Finance_Group

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Re: Prosper Files 10-Q for Q1-2014
« Reply #6 on: May 19, 2014, 05:52:51 pm »

Total losses = $79,699,639

Thats just since SEC registration and doesnt include losses incurred in the many years before that.

Valid point. 

According to the Balance Sheet at 03/31/2014 the accumulated deficit is $106,246,000
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Fred93

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Re: Prosper Files 10-Q for Q1-2014
« Reply #7 on: May 19, 2014, 08:25:05 pm »

According to the Balance Sheet at 03/31/2014 the accumulated deficit is $106,246,000

Quite a lot really. 

But theyll be profitable any day now.  {cue the music from Annie.}

havastat

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Re: Prosper Files 10-Q for Q1-2014
« Reply #8 on: May 21, 2014, 06:35:26 pm »

Agree with Fred93 here. Prospers situation today is not all that different from Lending Clubs a few years ago. It has a large deficit, but has been growing rapidly enough that it is likely to reach profitability in the not too distant future, despite large increases in its spending to promote itself. The ratio between total revenue and total costs is still well under 1, but it has been rising rapidly, just like Lending Clubs did before it became profitable.

If it keeps growing rapidly, than in a few years the $10M it spent to settle the lawsuit wont look like all that much, and may have been well worth the peace of mind and removal of doubts about its legal situation that it buys.
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Urbi_et_Orbi

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Re: Prosper Files 10-Q for Q1-2014
« Reply #9 on: May 22, 2014, 02:15:41 am »

Agree with Fred93 here. Prospers situation today is not all that different from Lending Clubs a few years ago. It has a large deficit, but has been growing rapidly enough that it is likely to reach profitability in the not too distant future, despite large increases in its spending to promote itself. The ratio between total revenue and total costs is still well under 1, but it has been rising rapidly, just like Lending Clubs did before it became profitable.

If it keeps growing rapidly, than in a few years the $10M it spent to settle the lawsuit wont look like all that much, and may have been well worth the peace of mind and removal of doubts about its legal situation that it buys.

I read Freds comment quite differently from how you appear to have interpreted said comment.

alexpkeaton

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Re: Prosper Files 10-Q for Q1-2014
« Reply #10 on: May 22, 2014, 08:06:01 am »

Agree with Fred93 here. Prospers situation today is not all that different from Lending Clubs a few years ago. It has a large deficit, but has been growing rapidly enough that it is likely to reach profitability in the not too distant future, despite large increases in its spending to promote itself. The ratio between total revenue and total costs is still well under 1, but it has been rising rapidly, just like Lending Clubs did before it became profitable.

If it keeps growing rapidly, than in a few years the $10M it spent to settle the lawsuit wont look like all that much, and may have been well worth the peace of mind and removal of doubts about its legal situation that it buys.

I read Freds comment quite differently from how you appear to have interpreted said comment.
In Bubble 2.0 a company in the hole for $100MM is worth $600MM, didnt you hear? Theyre well on their way to becoming a $1B company, all they have to do is lose another $100MM.
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Ray Kremer

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Re: Prosper Files 10-Q for Q1-2014
« Reply #11 on: June 03, 2014, 11:18:58 am »

So just to get a mental graph of this, its roughly $3mil from Q2 2009 to Q3 2011, then between Q4 2011 and Q1 2013 it bounces around in the $3.5-4.5mil region. Q2 2013 spikes to $6mil (ignoring the settlement) and stays high the next quarter at $5mil, after which it sinks back to $3mil for two quarters, bringing us to the present.

So theres a couple ways to look at this. You could say theyve done a lot in the past six months to half their deficit and now its continuing a downward trend towards profitability. You could say they had a two year period during which their deficit grew a lot but now its gone back to the "normal" level, the line that they spent three years at and could never get below.

It kind of seems like if after 5 years they cant turn a profit it shows something is wrong with the business model, but I remembered that Amazon.com is said to have gone a long time without turning a profit, so I poked at google a little. Just a search on amazon profitable turns up several articles that talk about why profit isnt important to Amazon, and why that counter-intuitive concept makes any sense at all. Heres just one of those:
http://www.slate.com/articles/business/moneybox/2014/01/amazon_earnings_how_jeff_bezos_gets_investors_to_believe_in_him.html

I have no idea if the same sort of "profit doesnt matter" phenomenon applies to Prosper. One still wants to think that confidence in the company cant alone keep it afloat forever if they never at least break even. Im still trying to figure out what a decent thing to do is for the small investor that wants a low-maintenance portfolio is. Ive got money in CDs right now but rates are crap. I made out okay with the money I stuck into Prosper years ago but once I read everything here I lost confidence in the P2P lending model.
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ira01

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Re: Prosper Files 10-Q for Q1-2014
« Reply #12 on: June 03, 2014, 11:43:07 am »

So just to get a mental graph of this, its roughly $3mil from Q2 2009 to Q3 2011, then between Q4 2011 and Q1 2013 it bounces around in the $3.5-4.5mil region. Q2 2013 spikes to $6mil (ignoring the settlement) and stays high the next quarter at $5mil, after which it sinks back to $3mil for two quarters, bringing us to the present.

So theres a couple ways to look at this. You could say theyve done a lot in the past six months to half their deficit and now its continuing a downward trend towards profitability. You could say they had a two year period during which their deficit grew a lot but now its gone back to the "normal" level, the line that they spent three years at and could never get below.

It kind of seems like if after 5 years they cant turn a profit it shows something is wrong with the business model, but I remembered that Amazon.com is said to have gone a long time without turning a profit, so I poked at google a little. Just a search on amazon profitable turns up several articles that talk about why profit isnt important to Amazon, and why that counter-intuitive concept makes any sense at all. Heres just one of those:
http://www.slate.com/articles/business/moneybox/2014/01/amazon_earnings_how_jeff_bezos_gets_investors_to_believe_in_him.html

I have no idea if the same sort of "profit doesnt matter" phenomenon applies to Prosper. One still wants to think that confidence in the company cant alone keep it afloat forever if they never at least break even. Im still trying to figure out what a decent thing to do is for the small investor that wants a low-maintenance portfolio is. Ive got money in CDs right now but rates are crap. I made out okay with the money I stuck into Prosper years ago but once I read everything here I lost confidence in the P2P lending model.

Amazon doesnt turn huge profits because it sinks all its earning back into the business, expanding into other areas (such as the new delivery service for food, and its new streaming TV service), as well as into infrastructure (tons of new fulfillment centers to allow faster -- in some cases same day -- delivery) that improves its service.  Assuming it chooses wisely and executes well, those investments will turn into huge profits later.  But Prosper is nothing like that.  Prosper isnt making a ton of money from its core business, and investing those funds into new areas.  It hasnt been able to make any money from its core (only) business.  Moreover, Amazon is well-run, and has a deserved good reputation.  Prosper?  Not so much. 
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