Hydra sells crap and empty promises

drunk

drunk

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Mar 21, 2010
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As youve already read it here Hydra For Sale? | NickyCakes.com (shameless promotion), hydra is selling out.

Now whats so amuzing about it? Their "Business Summary" (you can download from cakes blog).

Its so full of crap that it deserves its own thread.

I hope I am not causing any trouble by posting it here or in other words - in before cakes&jon get sued ;)


Exhibit 1

In early 2009, Hydra came to an inflection point. The Company could continue to be managed for short-term revenue and cash flow generated by low value clients, or it could lead the industry in a move up-market by...
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...As of the end of 2009, Hydra had successfully purged its network of all advertisers deemed low quality. Hydra focuses exclusively now on high quality brand and direct response advertisers.
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^ Yea right, rebills died and so did their "business".


Please continue with your exhibits.​
 
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drunk said:
in before cakes&jon get sued ;)
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Don't worry, linking to a document with the word "confidential" by someone not bound by any sort of agreement is about as suable as me writing "confidential" on this thread and someone linking to it.

Of course, people can sue for anything if they want, and I guess frivolous lawsuits would be a good way to get to $20mil/year in operating expenses...

Carry on.
 
nickycakes said:
Don't worry, linking to a document with the word "confidential" by someone not bound by any sort of agreement is about as suable as me writing "confidential" on this thread and someone linking to it.

Of course, people can sue for anything if they want, and I guess frivolous lawsuits would be a good way to get to $20mil/year in operating expenses...

Carry on.
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I may be wrong, but I thought it was determined that operating expenses included payroll.. a.k.a paying affiliates.
 
Falian said:
I may be wrong, but I thought it was determined that operating expenses included payroll.. a.k.a paying affiliates.
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No, that's filed under "Cost of Sales". Operating expenses is 65% employee payroll according to the document. In 09, they brought in 87,801,560 in revenue (about 1mil being internal email and ppc) and paid 70,434,793 to affiliates. Profit would then be 17,466,767, about a 20% margin. They then spent 22,226,014 on "operating expenses" giving them earnings of -4,859,247, but they have this field at the bottom called "normalizing adjustments" which gives them about 7mil putting them into the black. No idea what that field is and I can only guess new investor money.

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nickycakes said:
No, that's filed under "Cost of Sales". Operating expenses is 65% employee payroll according to the document. In 09, they brought in 87,801,560 in revenue (about 1mil being internal email and ppc) and paid 70,434,793 to affiliates. Profit would then be 17,466,767, about a 20% margin. They then spent 22,226,014 on "operating expenses" giving them earnings of -4,859,247, but they have this field at the bottom called "normalizing adjustments" which gives them about 7mil putting them into the black. No idea what that field is and I can only guess new investor money.
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You posted ALL this shit about Hydra, yet, failed to read the entire document... Nice.

7 million normalizing adjustments consist of:

5.8 mil = Bad debt. (THAT sucks.)
2 Mil. Recapitalization (probably new investment funds)
1 Mil. Legal Costs (Probably with the founder break up and pursuing said bad debt.)
1.8 mil "other"
 
070707 said:
You posted ALL this shit about Hydra, yet, failed to read the entire document... Nice.

7 million normalizing adjustments consist of:

5.8 mil = Bad debt. (THAT sucks.)
2 Mil. Recapitalization (probably new investment funds)
1 Mil. Legal Costs (Probably with the founder break up and pursuing said bad debt.)
1.8 mil "other"
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Thanks for breaking that out for me. I'm awful at reading financial statements.

So how can they include 7-8mil of bad debt as income on the balance sheet? Is this like... Oh...if they had only paid us, we would have made a profit this year?
 
nickycakes said:
Thanks for breaking that out for me. I'm awful at reading financial statements.

So how can they include 7-8mil of bad debt as income on the balance sheet? Is this like... Oh...if they had only paid us, we would have made a profit this year?
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I just looked at the income statement again and did a little research.

EBIT = Earnings before income & taxes, that shows they are in the hole a few million

Normalizing Adjustments:

  • Type 1 Normalizing Adjustments. These are adjustments that eliminate one-time gains or losses, other unusual items, non-recurring business elements, expenses of non-operating assets, and the like. Every appraiser employs such income statement adjustments in the process of adjusting (normalizing) historical income statements. Regardless of the name given to them, there is virtually universal acceptance that Type 1 Normalizing Adjustments are appropriate for consideration.
  • Type 2 Normalizing Adjustments. These are adjustments that normalize officer/owner compensation and other discretionary expenses that would not exist in a reasonably well-run, publicly traded company. Type 2 Normalizing Adjustments should not be confused with control adjustments or Type 1 Normalizing Adjustments.
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That makes me think that it was an influx of cash from investors. If they did a normalizing adjustment to their debt, then they would be 11 mill in the hole.
 
Operating expenses in 2010 (projected) - $12,440,199
Employee compensation projected to account for 65% of total operating expenses in 2010.

Quick math - Employee compensation in 2010 projected to be $8,086,130.
Hydra employes 52 individuals.

Average of $155,500 annual per employee. Good salary if its distributed in a near even manner.

Does anyone have inside information on how much network pips make, ie affiliate managers?
 
I'm also very surprised that their 2009 revenue is %98.5 via Third-Party Publisher Network and less than %1.5 comes from internal.

I was pretty confident that networks do much more internal than that.
 
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