SEEKING ALPHA - Feb 22 - FriendFinder Networks (FFN) network consists of 40K sites, with ~520M registrants, 70% above the total US population and 62% of Facebook's (FB) monthly active users. At the end of 2011, the share price was $0.60. Since then, it has nearly quadrupled, to $2.33 now. With more than 31.2M shares outstanding, the total market capitalization is $72.7M. AsiaFriendFinder.com is the largest dating site targeted towards Asians with ~34M members, whereas Amigos.com, which targets Latin Americans, has attracted 75K new members each month. As of September 2011, the company has $617M liabilities, including more than $450M long-term debt. And those long-term liabilities are used to finance $320M goodwill. The equity is a negative number, of $-119M. Potentially, with the large goodwill carried in its book, there is a very high probability that FFN has to write down its goodwill sometime in the future. When it happens, the price will begin to experience contraction. And it might be the time to begin shorting the stock.
by Anh Hoang
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