Quote:
Originally Posted by Dwreck
I don't have a strong financial background can you explain this to me in English  |
to create ffn, they company agreed to pay lars and andrew a certain large sum of money that the company didnt have to start with. so they are in debt, with the debt instruments held by andrew and lars. the idea was they when the company goes ipo, they get paid off and also make some more money on the stock in the new company that they own.
they tries to ipo a few times, the first was big enough to cover all of the debt. the most recent one that actually went through was for a small percentage of the debt. if ffn actually has to pay the debt service for the remaining amounts and pay the actually debt, they will be more than broke. they would appear to have more debt than their entire yearly income.
this comes from a company that has spent years losing money on average for every customer they took on, paying out more to obtain new customers than the total those customers would pay over their lifetime. ffn has continued to rack up losses as a result of their over generous affiliate programs and marketing costs related to obtaining new customers.