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Prosper Discussion => Investors - P => Topic started by: Xenon481 on August 15, 2013, 01:09:01 AM

Title: Prosper Files 10-Q for Q2-2013
Post by: Xenon481 on August 15, 2013, 01:09:01 AM
http://www.sec.gov/Archives/edgar/data/1416265/000114036113032671/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 **

* = Prosper is recording the entire $10million class action lawsuit settlement cost in Q2 of 2013.
** = Prosper's quarterly operating loss (not counting the $10million settlement) is over $6million which is ~30% higher than their previous record for a quarterly loss.


Prosper currently has (as of June 30th, 2013) a combined "Cash and Cash Equivalents" of $10,515,000, but this is before having made any payments for the Class Action Lawsuit settlement.

- Prosper Assets: $208,617,000 ***
- Prosper Liabilities: $202,325,000 *** (including the $10million settlement)
------------------------------------------
- Prosper Net Worth: $6,292,000

*** = Note that both Prosper's Assets and Liabilities include the ~$187million in outstanding loans.


- Compensation increased by ~$765k (~30%) between Q1 and Q2.
- Marketing increased by ~$2.3million (~147%) between Q1 and Q2.



At Prosper's current cash level and burn rate (and taking into account the first payment they will need to make for the Settlement), Prosper only has 1-2 more quarters until they will require yet another venture capital cash infusion lest they declare bankruptcy.
Title: Re: Prosper Files 10-Q for Q2-2013
Post by: New Jersey Guy on August 15, 2013, 02:30:58 AM
I'm not on Prosper, and I don't follow Prospers problems as much as others.  Maybe they are in trouble, maybe they aren't.  I'll let Prosper investors who know more about it state their opinions.

Let's see, I log onto that Prosper.org site you list, and I get this message:
The content and members of this site are not necessarily neutral, or even sensible. There is a lot of value, but also a lot of junk.


So then I read the article by Motley Fool.  Interesting!  Then I notice it's from 2008.  It's old news about problems Prosper had, and overcome.  Even I know about their very high default rates from that period.  I mean, who here doesn't?

It's 2013 now, and from what I understand Prosper is on the upswing.  Peter has inside contacts, and he seems optimistic about Prospers future.

You may be correct in your assumption.  However, when you try and justify your opinions with (now) worthless information, it takes away from your credibility and I take your whole post with a grain of salt.
Title: Re: Prosper Files 10-Q for Q2-2013
Post by: Xenon481 on August 26, 2013, 08:27:31 AM
http://www.sec.gov/Archives/edgar/data/1416265/000141626513000582/ps8d08d23d2013.htm

Prosper just filed an 8-K with the SEC stating that their CFO (Kenneth Niewald) has resigned and will be replaced by Joshua P. Hachadourian.
Title: Re: Re: Prosper Files 10-Q for Q2-2013
Post by: rawraw on August 26, 2013, 09:11:22 AM
http://www.sec.gov/Archives/edgar/data/1416265/000141626513000582/ps8d08d23d2013.htm

Prosper just filed an 8-K with the SEC stating that their CFO (Kenneth Niewald) has resigned and will be replaced by Joshua P. Hachadourian.
Rarely a good sign

Sent from my SAMSUNG-SGH-I747 using Tapatalk 2

Title: Re: Prosper Files 10-Q for Q2-2013
Post by: investforfreedom on August 26, 2013, 09:54:55 AM
They spent $2.3 million more on marketing and advertising in Q2 than in Q1, but their total revenue had increased only by $1.7 million. Obviously, their advertising campaign has not been very effective or not effective enough. 

Marketing and Advertising: from $1.57 million in Q1 to $3.88 million in Q2;
Total Revenue: from $1.7m Q1 to $3.4m in Q2.

http://yahoo.brand.edgar-online.com/displayfilinginfo.aspx?FilingID=9282976-24576-162870&type=sect&TabIndex=2&companyid=760693&ppu=%252fdefault.aspx%253fcik%253d1416265

That is probably the reason why their CFO has resigned. 

Title: Re: Prosper Files 10-Q for Q2-2013
Post by: Fred on August 26, 2013, 11:51:16 AM
It's a 6-week tenure as PMI CFO:

On July 17, 2013, Kenneth Niewald was appointed Chief Financial Officer of PMI.
(http://www.sec.gov/Archives/edgar/data/1416265/000114036113032671/form10q.htm)


Seems nobody wanted to be the CFO:

Daniel P. Sanford resigned as SVP, Finance of PMI and as Treasurer of Prosper Funding, effective as of May 1, 2013.  On that same date, Kenneth L. Niewald was appointed to serve as Acting Chief Financial Officer of PMI and as Treasurer of Prosper Funding and was designated as the principal financial and accounting officer of both PMI and Prosper Funding.
(http://www.sec.gov/Archives/edgar/data/1416265/000114036113019880/form10q.htm)

Title: Re: Prosper Files 10-Q for Q2-2013
Post by: core on August 26, 2013, 01:09:00 PM
Is it possible some accounting games are being played, the CFOs are being asked to sign fraudulent statements, and these CFOs are resigning instead so as not to end up as somebody's prison girlfriend?  Hard to imagine someone resigning after 6 weeks just because the company's not doing well.   The CFOs knew things were bad when they signed on and a few weeks is hardly enough time to make a real turnaround.

Theories aside, when is it time to pull money out of Prosper?
Title: Re: Prosper Files 10-Q for Q2-2013
Post by: hippo387 on August 26, 2013, 04:20:12 PM
Prosper was in much worse shape several months ago and received a significant sum to keep operating. With the class action behind them and the industry continuing to grow rapidly, there will be plenty of VC funding available. Investors see a disruptive industry and a potentially lucrative IPO on the horizon -- which, by the way, does not depend on the company being profitable. You can argue that is illogical, but that's the reality of start-ups. Look at Amazon, they still don't make money consistently.

Xenon has a hobby horse, a bone to pick for some reason, and I wouldn't stop investing based on his forum posts.
Title: Re: Prosper Files 10-Q for Q2-2013
Post by: DanB on August 26, 2013, 04:45:36 PM


Theories aside, when is it time to pull money out of Prosper?

I am not sure questions such as this can be answered while setting aside theories.
Title: Re: Prosper Files 10-Q for Q2-2013
Post by: Fred on August 26, 2013, 10:11:46 PM
Theories aside, when is it time to pull money out of Prosper?

Umm, now?

I have been transferring money from Prosper to LC ever since my AQI produced no results (i.e., Q1 2013).  In addition, Prosper has lower Sharpe ratios, giving a compelling reason to do this quickly.
Title: Re: Prosper Files 10-Q for Q2-2013
Post by: neals384 on August 26, 2013, 10:48:42 PM
How do you calculate sharpe ratio for Prosper?  Or LC?
Title: Re: Prosper Files 10-Q for Q2-2013
Post by: Fred on August 27, 2013, 12:48:46 AM
How do you calculate sharpe ratio for Prosper?  Or LC?

http://en.wikipedia.org/wiki/Sharpe_ratio

I usually take the 5-yr Treasuries for Rb.

The Ra and variance can be calculated on per-grade basis.
Title: Re: Prosper Files 10-Q for Q2-2013
Post by: core on August 27, 2013, 02:06:52 AM
Theories aside, when is it time to pull money out of Prosper?

Umm, now?

I have been transferring money from Prosper to LC ever since my AQI produced no results (i.e., Q1 2013).  In addition, Prosper has lower Sharpe ratios, giving a compelling reason to do this quickly.

I can see it's going to take way more coffee to comprehend that Sharpe ratio, and maybe a bit of voodoo as well.  My variance is rather low there so I would imagine the Sharpe ratio would be quite high.  All the risk comes from a Prosper BK and this is assuming their new BK failsafe doesn't work... none of which is taken into account in that formula.

I think I'm going to stick around until the end but make sure to not let the cash build up too high.  If things get volatile it could present some profitable trading opportunities.  A mass panic and Folio selloff could be rather fun.
Title: Re: Prosper Files 10-Q for Q2-2013
Post by: Fred on August 27, 2013, 02:36:59 AM
I can see it's going to take way more coffee to comprehend that Sharpe ratio, and maybe a bit of voodoo as well.  My variance is rather low there so I would imagine the Sharpe ratio would be quite high.  All the risk comes from a Prosper BK and this is assuming their new BK failsafe doesn't work... none of which is taken into account in that formula.

A bankruptcy should mean returns = -100% (or slightly less if you already received some payments).  This should reduce your average return, increase your variance, and of course decrease your Sharpe ratios.
Title: Re: Prosper Files 10-Q for Q2-2013
Post by: rawraw on August 27, 2013, 03:06:35 PM
Are you willing to post those calculations in another thread Fred?
Title: Re: Prosper Files 10-Q for Q2-2013
Post by: core on August 27, 2013, 03:13:04 PM
A bankruptcy should mean returns = -100% (or slightly less if you already received some payments).  This should reduce your average return, increase your variance, and of course decrease your Sharpe ratios.

Yes but it hasn't happened yet.  A single stock could go to zero, even an entire index, but I bet you don't calculate it that way and assume the theoretical worst case?
Title: Re: Prosper Files 10-Q for Q2-2013
Post by: Fred on August 27, 2013, 05:27:21 PM
Are you willing to post those calculations in another thread Fred?

How the ratios are calculated, and how they are used in my risk models, are part of my secret recipe.  Unfortunately, I cannot share more than the fact I use them in my models.
Title: Re: Prosper Files 10-Q for Q2-2013
Post by: Fred on August 27, 2013, 05:42:25 PM
A bankruptcy should mean returns = -100% (or slightly less if you already received some payments).  This should reduce your average return, increase your variance, and of course decrease your Sharpe ratios.

Yes but it hasn't happened yet.  A single stock could go to zero, even an entire index, but I bet you don't calculate it that way and assume the theoretical worst case?

I ran my PnL numbers based on actual cash flows.  So in your case, the unrealized bankruptcy should not impact your portfolio's Sharpe ratios.

Some managers take into account the usual PD, LGD, EAD numbers; LC provides recovery rates -- which can be used as (1 - LGD) -- for various late stages.  If you are using this approach, then you should discount your defaults / BK loans accordingly (even prior to the actual charged-off).  This would impact your Sharpe ratios immediately.
 
Title: Re: Prosper Files 10-Q for Q2-2013
Post by: rawraw on August 27, 2013, 08:35:13 PM
Everyone seems to have a model these days  :P   Well if you ever decide to declassify those sharpe ratios, let me know :)
Title: Re: Prosper Files 10-Q for Q2-2013
Post by: Randawl on August 27, 2013, 09:25:23 PM
I bet my model could beat up your model on the playground!       8)       :P
Title: Re: Prosper Files 10-Q for Q2-2013
Post by: dontvote on August 29, 2013, 06:51:00 PM
I'll bet there are a lot of forum dwellers with secret models that look an awful like a blank sheet of paper or a raving lunatic's excel spreadsheet (LACES OUT). Not singling anyone out in particular.

dontaskmenoquestionsandi'lltellyounolies