December 13, 2018

Farmville

The Company That Brought You Farmville Is Going Public

In addition to the Nets’ financials, you’ve got plenty of reading to do over this long weekend.

Some highlights from Zynga’s S-1 courtesy of Zero Hedge:

• Q1 2011 revenue: $235.4MM, up from $100.9MM YoY, LTM revenue $731.9 MM
• Q1 Net Income: $11.8MM up from $6.4MM YoY, LTM Net Income: $96.2MM
• Q1 Adjusted EBITDA: $112.2MM, up from $93.5MM, LTM EBITDA: $411.4MM
• Adjusted EBITDA definition also excludes stock based comp and change in deferred revenue
• Cash: $995.6MM, almost the same size as the entire proposed IPO
• Working Capital: $603.4MM

Some other fun things of note:

&bull Jeffrey Katzenberg, CEO of DreamWorks is on the Board of Directors and serves on the compensation committee.

• CFO David Wehner is formerly of Allen & Company, an investment bank that specializes in media and technology. He has an M.S. in Applied Physics from Stanford and a B.S. in Chemistry from Georgetown. His total compensation for 2010 was $17,996,057, $16,087,500 of which was stock awards.

• The audit committee consists of Brad Feld, Reid Hoffman and Stanley Meresman. Feld is a MD at the VC firm Foundry Group, Hoffman is the former CEO of LinkedIn and Meresman, the chair of the committee, selected for “his background as chair of the audit committee of other public companies and his financial and accounting expertise from his prior extensive experience as chief financial officer of two publicly traded corporations.”

• Mark Vranesh is the Chief Accounting Officer and had total compensation for 2010 of $1,544,940, $1,287,000 was stock awards.

There’s plenty more to pour through, so have it. And yes, Ernst & Young says everything is kosher, so who wants a piece of this?

Zynga S-1 [SEC]

Accounting News Roundup: 1099 Reporting Is the Latest Political Football; Financial Reporting Overhaul in the Works?; Zynga’s CFO Hire Spurs IPO Talk | 08.02.10

Parties Play Politics With Unpopular Tax Measure [WSJ]
The new 1099 reporting requia bit of belly aching to point of many groups asking for a repeal. Too bad the members of Congress are the ones with the power to actually make something happen:

“The House rejected a bill Friday that would have repealed the provision. The two parties disagreed on how to make up the lost revenue.

‘This foolish policy hammers our business community when we should be supporting their job growth,’ Sen. Mike Johanns of Nebraska said in the Republicans’ weekly radio and Internet address Saturday. ‘It’s only one example of how the administration’s promise to support small businesses really rings hollow.’

Democrats blamed Republicans for Friday’s failure.

‘Despite all of their rhetoric about the need to eliminate this reporting requirement, Republicans walked away from small businesses when it mattered most,’ said Rep. Sander Levin (D-Mich.), chairman of the House Ways and Means Committee.”

FASB Alumnus Trashes GAAP (and IFRS) [The Accounting Onion]
“I suspect that the folks being paid the big bucks to make the tough calls on accounting standards don’t pay a lot of attention to to the likes of Tom Whatshisname, even were I to announce that the sky is falling. But, I don’t take it personally. Over the past 40 years, any PhD not drawing a salary from the Big Four has been viewed with more suspicion than respect by the standard setting establishment.

I mention all of this now, because there is a new voice, whose credibility and qualifications cannot be so easily dismissed. That voice belongs to FASB alumnus David Mosso, who has written an 80-page monograph entitled Early Warning and Quick Response: Accounting in the Twenty-First Century). If you don’t want to believe me, take it from him: GAAP is broken.”

Group formed to overhaul financial reporting [Accountancy Age]
Meanwhile: “A project to overhaul company reporting has been launched by a high level group of accountants, businesses, regulators and market participants.

The International Integrated Reporting Committee will look at the wider concerns about financial reporting, in terms of addressing risk, and presenting a clearer and broader picture of companies’ performance, including governance and environmental issues.”


Goldman Details Its Valuations With AIG [WSJ]
“How did Goldman come up with the mortgage-securities prices it used to extract cash from AIG?”

Before There Can Be An IPO, First Comes A New CFO For Zynga [Tech Crunch]
Dave Wehner comes in from Allen & Co. taking the spot of Mark Vranesh who is becoming Chief Accounting Officer. What does all this mean? First, it gives most MSM outlets a day or two worth of stories about when Zynga will go public but mostly it means the business of Farmville, no matter how you hate it, is serious business.

Facebook Would-Be Owner Says He Owes His Claim to Arrest [Bloomberg]
“Paul Ceglia, who claims in a lawsuit that he owns 84 percent of Facebook Inc., said his case wouldn’t have been possible if state troopers hadn’t come to his house in October to arrest him for fraud.”

Forced Employee Engagement and the Overworked Employee [The Exuberant Accountant]
“In my many interactions with business owners, I have heard some speak of employees as being ‘lucky to still have a job.’ While that may be true, thinking (and acting) in such a manner is very short sighted.”

Twitter, Facebook, LinkedIn? [AccMan]
Got business model?

People Get More Satisfaction From Filing Their Taxes Online Than Using Facebook

The emphasis isn’t needed but we’ve provided it anyway:

Despite being the most popular website in America, consumers don’t like Facebook, according to the 2010 American Customer Satisfaction Index (ACSI) E-Business Report, produced in partnership with ForeSee Results. Facebook scored 64 on the ACSI’s 100-point scale, which puts its satisfaction even lower than IRS e-filers. This puts Facebook in the bottom 5% of all measured private sector companies and in the same range as airlines and cable companies, two perennially low-scoring industries with terrible customer satisfaction.

It makes sense, really. If someone is filing their taxes electronically and something goes wrong, he/she is probably able to keep it together long enough to call up the IRS and tell him what the problem is. On the other hand, if Farmville starts acting up on Patrick Byrne (just as an example), we’re guessing the man loses his shit.

Accounting News Roundup: UBS Deal Back on Track; Allen Stanford’s Circus Causes Problems for Co-Defendants; Zynga Lands $147 Million | 06.15.10

Swiss Parliament Backs UBS Pact [WSJ]
After telling U.S. and IRS to drop dead last week, the lower House of Swiss Parliament has approved the deal to turn over 4,450 names as part of UBS’ settlement involving their assistance to taxpayers in the U.S. evade their obligations through offshore accounts.

There’s one small problem remaining – the lower house wants to put the agreement to a popular referendum while the upper house in parliament is opposed to the idea. The two have until Friday to reconcile their differences, otherwise another vote will be necessary to settle the referendum issue.

The problem with the referendum is that it could take months for happen and it could cause the Swiss to miss the August deadline that it agreed to. This could lead to fresh charges against UBS and further extending a story that pretty much everyone has grown tired of.


Stanford’s Co-Defendants Try to Flee the ‘Circus’ [DealBook]
Stanford’s Chief Investment Officer, Chief Accounting Officer and Controller are all attempting to sever themselves from Al’s proceedings because he’s an absolute drama whore.

Former CIO Laura Pendergest-Holt’s motion to have her trial severed describes RAS’ conduct as ‘egregious and circus-like conduct,’ using the term “circus” at least eight times.

So while a circus is infinitely fun for the rest of us, it doesn’t really do co-conspirators any good when they are trying to get a fair trial.

Dealing With a Toxic Resumé [FINS]
How can you move past a job with a tax company like Stanford, Countrywide, Bear Stearns et al.? You might just want to GIVE UP (and that could be advisable if you were a perp) but there are some things you can do to wash away that taint on your resumé.

For starters don’t bad mouth the old company, even though they probably deserve it. Secondly, you might attach an addendum to your resumé in order to explain the whole sitch and you can always turn the situation into a positive by explaining how you’ve learned from working at such a lousy company.

Keep your chin up, you’ll be back to being a white collar working stiff in no time.

Duke boy dodges tax hazard [Tax Watchdog]
John Schneider, aka Bo Duke, and his wife owe California about $28,000 in back taxes. Turns out his old accountant left him ‘high and dry’ so he’s working it out with Arnie.

Zynga Receives $147 Million Investment From Japan’s Softbank [Bloomberg BusinessWeek]
Memo to Farmville Haters: it’s here to stay and there will be more to come.

Will a Boycott of Overstock.com Thwart Patrick Byrne’s Auditor Hunt?

Thumbnail image for patsy_byrne.jpgGuys and gals, we here at GC are concerned about something. Something other than who the next face of Accenture will be (honestly we’re excited about Chuck’s commanding lead).
No, we’re concerned that your humble servant and Farmville enthusiast Patrick Byrne is going to be unable to find an auditor for Overstock.com. The company has until January 18th to pull something together so the NASDAQ doesn’t delist them and if things continue the way they are, it’s going to be hello Pink Sheets.
Maybe things wouldn’t look so grim if PB hadn’t blown off CNN. Or if he hadn’t pissed off every single financial journalist and blogger by getting too friendy.
But now that Barry Ritholtz has called for a boycott, any hope for finding the next auditor to put the stamp of approval on OSTK’s financial statements is fading.
Wait! Gary Weiss has his doubts: “As for that boycott: great idea, except that with Byrne manipulating the financials, how would you know if it is having any impact?”
Whew! There’s still a glimmer.
Boycott Overstock.com [The Big Picture]

Is Patrick Byrne’s Facebook Friends List Motivated by a Farmville Obsession?

Thumbnail image for farmvillePat.jpgWe haven’t really touched on the Patrick Byrne’s ill-fated attempt to stalk his critics (and all their friends, acquaintances, and complete strangers) mostly because we weren’t on the list and those that were (including Gary Weiss, Sam Antar, Joe Wiesenthal, and Barry Ritholtz) are doing a fine job of pointing out how desperate, shady, and just plain fucking bad this makes Patsy, his head minion at DeepCapture Judd Bagley, and Overstock look.
We only bring it up now because we’d like to point out that it’s worth speculating on the other side of this story. Our contention is that P. Byrne, being of questionable mind and maturity, is OBSESSED with Farmville and it is his personal mission to destroy the Farmvilles of his critics and their FB friends (now who’s movin’ up in Farmville, bitches?).
This agonizing torture method will eventually wear down the haters to the point to where no one will be able to take the man, his doomed-to-fail quest to locate an auditor, and his company seriously and will thus give up their quest of destroying him.
The only other thing we can come up with is that he has an intense hatred of trite status updates and was going to expose everyone for their lack of substantive commentary but we find all his critics to be interesting bloggers, so we tossed that theory.
Grant Thornton and PwC have got to feel pret-tay good about how this all turned out. If you’ve got you own theories or thoughts on this situation, feel free to discuss them here.