Livestrong.com, Demand IPO exposed

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petethedrummer said:
I only just found out that Demand Media are responsible for that expert village rubbish on youtube. This being a fine example of their work: http://www.youtube.com/watch?v=2lJEslVrLRY
I did not know that. I remember seeing that Expert Village crap for recipe videos. It seemed like all their recipe demonstrations would be chopped into several very short video segments so that you had to watch a grundle of segments to get one freakin' six or seven minute demonstration.
 
Dec 5, 2010
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Shortleg said:
Velo: Just curious re your calculation of LA's "1,062,500 options." At p 189 of the iPO LA is listed as having 106,250 'beneficially held' options - curious as to how that figure ramps up to over a million as I can see no reference in that section, as is common in other parts of the IPO, to all "numbers being in thousands" etc.

Between LA & LAF I note a total of 1,387,500 shares, split as follows:

P. 189 "beneficially held" options
LA: 106,250
LAF: 125,000

P. 197 "Preferred Stock"
LA: 531,250
LAF: 625,000

I'm unfamiliar with IPOs and share dealings generally - let alone in the US - so have sought some assistance from some finance types here to unpick some of these threads.

I'm particularly curious to work out a value for the total of 61,523 shares that LA & LAF have put up for offer - with an exercise price of $6 and assuming that the proposed price of $15 a share is met on my reckoning that leaves $9 profit per share=$554,067.
But Google's announcement re content farms and the generally negative comment in the press may queer the deal a tad...
I'm not sure which pages you refer to. Looking through the Demand IPO S-1 form at the pages you quote I can see no reference to those figures. However, on page 170 of the S-1 there is the following table

Which specifically states the following:

"The following table shows the outstanding warrants to purchase shares of our common stock as of June 30th 2010. These warrants may be exercised at any time prior to their respective termination dates.

Name of holder - Lance Armstrong Class of stock - Common stock Date of issue - Jan 15th 2008 Shares subject to warrant - 1,062,500 Exercise Price - $6/share

Name of holder - Lance Armstrong Foundation Class of stock - Common stock Date of issue - Jan 15th 2008 Shares subject to warrant - 1,250,000 Exercise Price - $6/share

Name of holder - Capital Sports & Entertainment LLC Class of stock - Common stock Date of issue - Jan 15th 2008 Shares subject to warrant - 182,500 Exercise Price - $6/share
 

Dr. Maserati

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Shortleg said:
Velo: Just curious re your calculation of LA's "1,062,500 options." At p 189 of the iPO LA is listed as having 106,250 'beneficially held' options - curious as to how that figure ramps up to over a million as I can see no reference in that section, as is common in other parts of the IPO, to all "numbers being in thousands" etc.

Between LA & LAF I note a total of 1,387,500 shares, split as follows:

P. 189 "beneficially held" options
LA: 106,250
LAF: 125,000

P. 197 "Preferred Stock"
LA: 531,250
LAF: 625,000

I'm unfamiliar with IPOs and share dealings generally - let alone in the US - so have sought some assistance from some finance types here to unpick some of these threads.

I'm particularly curious to work out a value for the total of 61,523 shares that LA & LAF have put up for offer - with an exercise price of $6 and assuming that the proposed price of $15 a share is met on my reckoning that leaves $9 profit per share=$554,067.
But Google's announcement re content farms and the generally negative comment in the press may queer the deal a tad...
Where did you see those figures? I have checked the documents - do you have another document and can you link it.

On either of these IPO's or S-1 there is no Page 189 - and even reading the 189th page of the reports it does not give those figures.

On page 170 (or 190 of 294)of this document.

Same with this document - no page 189.

I have even run a search of the document with the word "beneficially", 14 returns but none have to do with LA or the LAF.

If you check page 170 of the actual IPO it clearly states.
Lance Armstrong 1,065,200
Lance Armstrong Foundation 1,250,000
Capital Sports Entertainment, LLC 187,500
 
Dec 5, 2010
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kurtinsc said:
Officially I'm not sure what Lance's relationship is with Livestrong.

I say "officially" because we all know he has a lot of pull. But he's not on the board and doesn't seem to have any official management role with the charity.

It's a sweet setup, but by the letter of the law I'm not sure he's doing anything different then someone who say was a volunteer spokesperson for the American Diabetes Association getting paid to sell test strips for Lifescan or insulin for Eli Lilly.
Lance is on the board of directors of Livestrong / LAF (screenshot)

Listed as Chairman and Founder
 

Dr. Maserati

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Jun 19, 2009
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Colm.Murphy said:
Really interesting stuff.

May I just point out that back when news of Landis' confession and the subsequent follow-up into some of the accusations, it became known that the Feds were subpoenaing documents from, essentially, Lance's sponsors: Trek, Nike, Oakley, Giro, etc. It seemed at the time that they were looking for some evidence that would support the Landis claim of "Trek Bikes-for-Drugs".

Given the better understanding of this arrangement between the parties for the Demand media IPO, perhaps the Feds were also looking into all of the "Livestrong" arrangements that lance had with all these sponsors?
I would believe so - in particular as our old friend pops up on the Demand Media IPO: (Page 185)
In April 2006, we sold shares of our Series A preferred stock to certain investors, after which sale Thomas W. Weisel, an individual affiliated with Stifel Nicolaus Weisel, a co-manager for this offering, held less than 1% of the outstanding shares of our capital stock on an as converted, fully diluted basis. Mr. Weisel is also a party to our Stockholders' Agreement.
 
Jul 25, 2009
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kurtinsc said:
Well dang... I'm completely blind.

I agree then... pretty big conflict of interest there. I'm betting he's still legally covered, but takes away a lot of deniability.
I didn't find him on the list in 2010. I looked when we had the conversation about LA getting separate personal deals for endorsing products with the Livestrong brand. But I'm truly terrible at searching for things, either in real life or on the internets, so don't read too much into that.

For some reason I can't open the form 990s from any year except 2009, to check whether he was there in the years when the deals were done.

Dr Mas, It's a pity to truncate the LAF directors list before reaching Julian Day's name. It just adds to the general impression, that conflicts of interest are central to the way LA and the LAF do business.
 
Dec 5, 2010
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I Watch Cycling In July said:
I didn't find him on the list in 2010. I looked when we had the conversation about LA getting separate personal deals for endorsing products with the Livestrong brand. But I'm truly terrible at searching for things, either in real life or on the internets, so don't read too much into that.
the screen shot I tried to put up earlier is from the currently live page of Livestrong.org Lance is now and always has been founder & director.

I Watch Cycling In July said:
For some reason I can't open the form 990s from any year except 2009, to check whether he was there in the years when the deals were done.
As I say above, Lance has always been on the board of directors but you can access 990 forms back to 2003 here

I Watch Cycling In July said:
Dr Mas, It's a pity to truncate the LAF directors list before reaching Julian Day's name. It just adds to the general impression, that conflicts of interest are central to the way LA and the LAF do business.
You may want to blame me for that and for the record there was no attempt to make anything seem to be something it isn't, I got the screen shot and am on a netbook right now and that's all that would fit on my screen.
 
Jan 15, 2011
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Velocentric said:
I'm not sure which pages you refer to. Looking through the Demand IPO S-1 form at the pages you quote I can see no reference to those figures. However, on page 170 of the S-1 there is the following table
I think I have established the source of the confusion between the statements I quoted from you above and my earlier query re numbers etc.

The document with the reference in the quote above to page 170 is dated, at about p. 2 of the S-1 and in red, "AUGUST 6, 2010".

I am working off a later issue S-1, with an issue date in red on the same page of "JANUARY 12, 2011" - see here.

Hence the confusion. You may want to look at the later version.
 
Oct 25, 2010
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Dr. Maserati said:
Yip - on the latest LAF 990 form, (page 8 of 60)

Lance Armstrong, Director, Hours per week, 1.0; and there is an X in the "individual trustee or Director;
Yet, interestingly, every trip he takes in the jet, he's working for LAF (supposedly).
 
Dec 5, 2010
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Shortleg said:
I think I have established the source of the confusion between the statements I quoted from you above and my earlier query re numbers etc.

The document with the reference in the quote above to page 170 is dated, at about p. 2 of the S-1 and in red, "AUGUST 6, 2010".

I am working off a later issue S-1, with an issue date in red on the same page of "JANUARY 12, 2011" - see here.

Hence the confusion. You may want to look at the later version.
Thank you for linking to the later S-1. First looked directly at the pages you reference and you're right with your figures. I've printed it off and will go over the whole thing now.

I'm no expert in this either but isn't what they've done here illegal? These warrants were issued as part of a contractual agreement back in 2008 and now they have substantially changed. I may be taking a very simplistic view of this but surely that's 'fluffing' an official document to make it appear more attractive pre-offering?
 
Jan 15, 2011
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Velocentric said:
I'm no expert in this either but isn't what they've done here illegal? These warrants were issued as part of a contractual agreement back in 2008 and now they have substantially changed. I may be taking a very simplistic view of this but surely that's 'fluffing' an official document to make it appear more attractive pre-offering?
I think it might be time to run some of these issues past those better informed and knowledgeable about these things than we seem to be...who said investment bankers and stock johnnies were ****ers...they may have a use after all!

Maybe some of the commentators that have been so scathing of Demand and its IPO may have some further thoughts once the growing list of apparent anomalies are identified...
 
Dec 5, 2010
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It gets worse. Demand also have an amended S1-A (click here) filed today which SUBSTANTIALLY changes the way Lance Armstrongs involvement with the company appears.

They've halved his warrants, doubled the costs, allocated "Beneficially held" stocks and then removed them in a matter of 2 weeks.

Somebody is covering tracks.
 
Velocentric said:
It gets worse. Demand also have an amended S1-A (click here) filed today which SUBSTANTIALLY changes the way Lance Armstrongs involvement with the company appears.

They've halved his warrants, doubled the costs, allocated "Beneficially held" stocks and then removed them in a matter of 2 weeks.

Somebody is covering tracks.
Are you sending this detail to interested parties? Don't waste it upon us.

Do you need some email addresses? Get it to Kimmage. Now! or anyone at the Sunday Times Sports section.
 
Jan 15, 2011
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3 different Demand Media S-1 documents

Velocentric said:
Thank you for linking to the later S-1. I'm no expert in this either but isn't what they've done here illegal?
OK, this took a little while to sort out but it now seems that Demand Media has issued three different (how different remains to be seen, but at first blush they seems to be well beyond simple amendments) S-1 IPO documents.

#1 - Issue date 6 August 2010

#2 - Issue date 12 January 2011

#3 - (thanks to Velocentric's detective work) Issue date 24 January 2011

As we say here in OZ, confusement rains...
 
Dec 5, 2010
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Shortleg said:
OK, this took a little while to sort out but it now seems that Demand Media has issued three different (how different remains to be seen, but at first blush they seems to be well beyond simple amendments) S-1 IPO documents.

#1 - Issue date 6 August 2010

#2 - Issue date 12 January 2011

#3 - (thanks to Velocentric's detective work) Issue date 24 January 2011

As we say here in OZ, confusement rains...
There are a total of 7 amended S1-A's filed with the SEC (click here)

I'm going to have to go over each one comparing the details to see exactly what changes have been made. At 200 pages a piece that's going to take me a few days. IPO is slated for next week, anyone got a few hours to spare to help out?

Hog, if you've got addresses, yes please.
 
Oct 25, 2010
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Shortleg said:
OK, this took a little while to sort out but it now seems that Demand Media has issued three different (how different remains to be seen, but at first blush they seems to be well beyond simple amendments) S-1 IPO documents.

#1 - Issue date 6 August 2010

#2 - Issue date 12 January 2011

#3 - (thanks to Velocentric's detective work) Issue date 24 January 2011

As we say here in OZ, confusement rains...
Happens with every big IPO. As demand is gauged, the stock gets spilt (to increase the "float" and windfall for investors and underwriters). So they have to update the documents to show the new market float (total number of shares outstanding). More and more people get added to the list as this goes along.

Going through an IPO is like Mr Toad's wild ride. Friggin insane.
 
Dec 5, 2010
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BotanyBay said:
Happens with every big IPO. As demand is gauged, the stock gets spilt (to increase the "float" and windfall for investors and underwriters). So they have to update the documents to show the new market float (total number of shares outstanding). More and more people get added to the list as this goes along.

Going through an IPO is like Mr Toad's wild ride. Friggin insane.
Can they do that with the warrants they issued as part of a contractual agreement back in 2008?
 
Oct 25, 2010
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Velocentric said:
Can they do that with the warrants they issued as part of a contractual agreement back in 2008?
No, but the number of shares each gets is getting updated right up until the end. Did I misunderstand? Forgive me if so.
 
Dec 14, 2010
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BotanyBay said:
Going through an IPO is like Mr Toad's wild ride. Friggin insane.
If I remember the old Disney World "Mr Toad's Wild Ride", you ended up in he|| at the end....

fitting analogy BB.
 
Dec 5, 2010
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Skipping over the vanishing "beneficially owned" stock for now and just sticking to the warrants issue:

In the 2010 filing Lance was shown as having been issued with warrants for 1,062,500 shares at $6/share.

In the January 24th filing Lance now holds warrants for 531,250 shares at $12/share.

What am I missing here?
 
Feb 21, 2010
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thehog said:
Are you sending this detail to interested parties? Don't waste it upon us.

Do you need some email addresses? Get it to Kimmage. Now! or anyone at the Sunday Times Sports section.
Sounds like they are preparing for the worst, such as an indictment upon return to the Motherland.

Fill the war coffers quickly and prepare for a protracted legal battle.
 

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