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During the IPO season Francis Gaskins, editor of IPOdesktop.com & director of research for Equities.com, regularly appears on CNBC TV, Bloomberg, thestreet.com & other financial cable channels. On the day of the Visa IPO he appeared on four cable TV financial shows including Bloomberg... More
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  • ReachLocal IPO: Never earned an operating profit. Rev run rate is $240 0 comments
    May 17, 2010 8:15 PM | about stocks: RLOC
    ReachLocal (NASDAQ:RLOC) $75mm IPO scheduled for May 20
    $488mm market cap at $18 price range mid-point

    SUMMARY
    . RLOC is not worth 9.2 times tangible book value
    . Revenue keeps increasing and the losses continue.  Not one quarterly or yearly operating profit in the SEC filing
    . Is the IPO window this open that a profitless, non-technology service company can IPO?
    . This isn’t operating profit: $16mm gain on 2009 acquisition of ReachLocal Australia

    BUSINESS
    . Internet ad agency offering a comprehensive suite of online marketing and reporting solutions, including search engine marketing, display advertising, remarketing and online marketing analytics, each targeted to the SMB (small, meidium-sized businesses) market
    . Delivers these solutions to SMBs through a combination of a proprietary RL Platform and direct, “feet-on-the-street” sales force of Internet Marketing Consultants, or IMCs, and select third-party agencies and resellers.

    CLIENTS, FOCUS & GROWTH PLAN
    At March 31, 2010, managed 19,700 Active Campaigns across 15,700 Active Advertisers, a substantial majority of which spend from $500 to $3,000 per month
    . Clients include SMBs in a number of industry verticals, such as home repair and improvement, automobile sales and repair, medical and health services, legal services and retail and personal services.
    . Employs 569 IMCs (Internet Marketing Consultants) in North America, Australia and the United Kingdom and works with over 350 third-party agencies and resellers that use the RL Platform to serve their SMB clients.
    . Intends to expand the IMC sales force both in existing and new markets.

    see the financial analysis in RLOC IPOreport





    Disclosure: none
    Themes: IPO Stocks: RLOC
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