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Messages - Xenon481

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1
Investors - P / Prosper Files 10-Q for Q3-2014
« on: November 19, 2014, 01:11:27 PM »
http://www.sec.gov/Archives/edgar/data/1416265/000114036114042762/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
Q2 2014 - Loss before other income: $95,000
Q3 2014 - Net Profit: $2,724,000

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


- Q3 2014 profits are high enough to put Prosper into the black for 2014 YTD.
- Although Prosper had a net profit, their net worth (assets minus liabilities, not including equity) went down by ~$16million, primarily due to using cash to repurchase ~$18.5million worth of stock that was originally sold to VC investors for ~$3.6million.
- Compensation and Benefits increased by ~12%
- Marketing and Advertising increased by ~19%
- Facilities and Maintenance increased by ~132%

2
Investors - P / Re: Prosper 1.0 Settlement Check
« on: August 19, 2014, 06:35:29 PM »
I received $39.47.

That is ~3% of my "Principal Charge-offs" of $1,320.95.

This payment is the first of 4 total payments to be made by Prosper and represents 20% of the total amount of payments.

From this, I can estimate that I will receive a total of $197.35 once Prosper has made all payments, which is ~15% of my "Principal Charge-offs".

3
Investors - P / Prosper Files 10-Q for Q2-2014
« on: August 17, 2014, 11:07:28 AM »
http://www.sec.gov/Archives/edgar/data/1416265/000114036114032894/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
Q2 2014 - Loss before other income: $95,000

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


- Q2-2014 is Prosper's lowest quarterly loss since their inception
- Prosper was able to increase (Q1 to Q2) their Originations Fees by ~90% while only increasing their total expenses by ~50%
- Compensation and Benefits was ~35% (~$1.4million) higher in Q2-2014 than it was in Q1-2014
- Marketing/Advertising/Rebates/Promotions costs were ~50% (~$3.3million) higher in Q2-2014 than it was in Q1-2014


It has always been my (and many others') opinion that many/most of Prosper's problems stemmed from the original management and public relations teams through their decisions to repeatedly alienate the community of lenders, their inability to react to constructive criticism like professionals, and their inability to structure their business in a scalable manner.

The new ownership/management team seems to have been able to clean house and root out much of the toxicity that came from the original management group; and through this have been able to find a way to properly scale their business model, putting themselves on the verge of positive quarterly cashflow/profitability.

4
Investors - P / Prosper Files 10-Q for Q1-2014
« on: May 14, 2014, 10:15:45 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.
** = Prosper's Q2 2013 quarterly operating loss (not counting the $10million settlement) is $6,175,000.

- Q1-2014 is Prosper's 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.

5
Investors - P / Prosper Files 10-K for 2013
« on: April 01, 2014, 11:30:58 PM »
http://www.sec.gov/Archives/edgar/data/1416265/000114036114014832/form10k.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

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

- Q4 2013 is Prosper's lowest quarterly loss since Q3 2011.
- As of 12-31-2013, Prosper had "Cash and cash equivalents" of ~$18million before making any payments to the Class Action Settlement.
- Prosper spent ~$13million in "Compensation and benefits" in 2013; ~27% higher than in 2012.
- Prosper spent almost $15million in in "Marketing and advertising" in 2013; over 2.6x as much as 2012.
- Not including the class action settlement, Prosper lost ~$1.8million more in 2013 than they did in 2012 even though Net Revenues were ~$10million higher (~3x 2012).
- Prosper spent ~44% more in "Facilities and maintenance" in 2013 than 2012.

The new management may have finally found a way to reduce Prosper's hemorrhaging of VC money, but only one quarter of not-as-bad numbers isn't a very significant dataset. We should know a lot more next month once Prosper releases their 10-Q for Q1 2014.

6
Investors - P / Re: Michigan Lender activity suspended
« on: January 14, 2014, 09:03:37 PM »
Once again, there is absolutely no legal reason for Prosper to deny you the ability to sell your notes. I can understand people in unlicensed states not being able to purchase notes, but there is no legal reasoning behind them denying you the ability to sell your notes.

7
Investors - P / Re: Only 27 Loans on the Prosper Site Monday AM?
« on: November 25, 2013, 12:27:56 PM »
Per Prosper's Performance Statistics page, while most days recently had been pretty steady with originations in the ~$2.5million range, very recent days have been dramatically lower: (Note, Prosper records originations money on the day of origination, and not on the day the listing originally went up)

- 11/21/2013 - $323,000
- 11/22/2013 - $1,563,438
- 11/25/2013 - $1,441,399 (this number may or may not increase through the day)

I don't know whether or not this is indicative of the system issues they were having last week or if there is some other sort of explanation(s) like someone in the verification chain having the day off or some such.

8
Investors - P / Prosper Files 10-Q for Q3-2013
« on: November 14, 2013, 09:34:19 PM »
http://www.sec.gov/Archives/edgar/data/1416265/000114036113042963/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

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

The two most recent quarters have been Prosper's biggest losses in their history.

Prosper currently has (as of September 30th, 2013) a combined "Cash and Cash Equivalents" of $29,300,000, but this is before having made any payments for the Class Action Lawsuit settlement. This is enough to last on the order of about 5 quarters at the current burn rate before needing an additional venture capital cash infusion.

- Prosper spent over half a million dollars more in advertisement and marketing during the quarter than they received in net revenue.

9
Exactly my point about bankruptcy being less likely -- higher growth means the business is more attractive to investors / suitors. Sorry I didn't spell it out in crayon for Xenon, the point has been made countless times.

I have only posted here estimated timings of when additional VC infusions would be required in order for Prosper to avoid Bankruptcy. I have never said anything like "Prosper is going to go bankrupt soon!"

From the thread about Prosper's 2013 Q2 SEC financial filings:
http://www.lendacademy.com/forum/index.php?topic=1447.0
Quote
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.

Looks like my estimation of timing for the VC infusion was accurate.

10
However, Xenon, it does indicate that a bankruptcy (which you have long warned of) is growing less likely by the day.

No, it doesn't if expenses continue to grow at a rate faster than revenues.

Prosper had their highest post SEC revenues in 2013 Q2, but that is also their quarter with by far the highest expenses. Even with record revenues, Prosper posted a 2013 Q2 loss (exempting the settlement) that was 30% higher than their previous record quarterly loss.

They have continued to burn through their VC cash faster and faster because they have thus far not been able properly scale their business.

11
Please note that whether or not this is a good thing for Prosper's bottom line is currently unknown.

All of Prosper's financial filings with the SEC have shown that they have classically been unable to properly scale their revenues with their expenses.  In nearly every single filing, even as Prosper's originations revenues increased, their expenses increased dramatically more.

Note that Prosper's quarterly losses have continued to get high and higher by significant percentages even though they keep increasing their originations revenues.

Past performance is not necessarily indicative of future results, but it does indicate that it is not a truism that increasing revenue increases profit.

It is possible that the new management has been able to make changes to Prosper which turns that expense scaling trend around, but there hasn't been any evidence to that case in the 2013 Q1 and Q2 filings. Maybe Q3 will be different or maybe it won't. We will just have to wait and see.

12
Investors - P / Re: Prosper Files 10-Q for Q2-2013
« 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.

13
Investors - P / Re: APS and Prosper Fighting
« on: August 22, 2013, 03:11:28 PM »
So the available cash should be net of this $10M liability.

That is not correct.

In the "Condensed Consolidated Balance Sheets" (p. 1), Prosper lists their "Cash and Cash Equivalents" as an "Asset" and they separately list the "Class Action Settlement Liability" as a separate line item under "Liabilities". See the below adapted from the 10-Q:

Quote from: Prosper's 2013-Q3 10-Q
Assets
Cash and Cash Equivalents$10,515,000
...
Liabilities
Class Action Settlement Liability$10,000,000

Therefore, Prosper has (as of end of June 2013) ~$10.5million in available "Cash and Cash Equivalents" before any payments made to the Class Action Lawsuit Settlement.

The $1M net income I referred to before was from "Condensed Statements of Operations" (p. 20).  This is actually a good news, since Prosper is now operationally profitable.

The information you are quoting is solely for Prosper Funding LLC (mostly just a shell corporation to hold the notes after origination) and not for the combined operations of both Prosper Funding LLC and Prosper Marketplace Inc.

According to the "Condensed Consolidated Statements of Operations" (p. 2), Prosper as a whole had a "Loss Before Other Income and Expenses" of ~$16,175,000 (including the $10million settlement, so ~$6.175million in actual operating loss before other income/expenses).

14
Investors - P / Prosper Files 10-Q for Q2-2013
« 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.

15
This has been done several times when one of Prosper's C level employees (now former) (username Anton) made bids he wanted to take back, but has not been done for normal people.

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