Long or Short Capital Reports Q4’07 Results

by Mr Juggles

Long or Short Capital’s fiscal 4th Quarter ended on 7/31/07, and the company reported its results in a press release:

Mr Juggles: “Greetings. We like numbers because they are objective. As the saying goes, opinions can lie, but numbers can’t. So let’s start the call off with some numbers. Number of quarters in Long or Short history with more revenue than Q4 2007? 0. Q over Q revenue growth? 850%. Q over Q traffic increase? 360%. As you are accustomed to hearing, this quarter was our best quarter ever by any metric, even made up ones like Mugabe references per a perf words.

The actions collectively taken in the third quarter, paid off handsomely. If you were to make a list of what we set out to achieve you could probably check off every single thing; we actually tried to do this but we found out that the list we wrote everything down on had been lost. We are working on this, and know that we take keeping track of lists to be among our top focuses in H1’08.

A lot of our subscriberholders have been concerned about our accounting situation and our delayed delivery of our Q and K. Let me tell you, we have been concerned too which is why we have mostly been ignoring the situation and hoping that it would go away. This did not turn out to be an effective solution and we are still having unable to reconcile our trailing quarterly results with our fiscal year results. What we did find out is that this situation is entirely consistent with SAAP, and thus, it is no impediment to filing.

Ssiztah, SSST, our measure of organic traffic, grew 19% sequentially, compared to only a 5% sequential improvement in Q3. Our proprietary “Eyeball Monetization Conversion” ratio, a non-pageview measure of revenue generated per customer, rebounded to $15.56 after dipping to $14.49 in Q3, as we the gains we picked up in text link ads more than offset our losses in referral revenue. Our EMCr increased 110% compared to Q4 2006.

Earnings per subscriberholder was $0.99 and we think the $0.90 to 1.10 level is sustainable. Despite its sustainability, we still expect to beat that going forward. That is how we do. We generated $1209 in revenue for the quarter, and as I mentioned earlier, that was an 850% increase year over year. The upside in our business is largely leveraging traffic growth over our advertising.

We see some additional opportunities for growth in text link ads which are not sensitive to traffic swings, but we expect short term volatility due to operational issues with one of our text link ad suppliers (Text-Link-Ads.com). Their ads are not functioning properly, and the vendor has been unhelpful and disinterested in assisting our tech team in rectifying the issue; our last 5 e-mails have gone unanswered. This is the same vendor who has in the past sold our ads on a discounted basis, without permission, at permanent and unalterable rates.

This pricing strategy of theirs is antithetical to our strategy of planning for future growth. Given their contractual 50% share on the revenue the ads they place generate from our site, this represents a fire sale of valuable site real estate. We are 100% against discounting and have no intentions to be a discount provider of satirical financial research. As such, we are actively exploring discontinuing our relationship with this ad vendor due to the fact that they are “sneaky terrible”.

Long or Short is as ad saturated as we are comfortable with. Our comfort level, in regards to this, is dependent on opportunities for marginal revenue and is, frankly, easily swayed. We do expect a pickup in CPA initiatives as the holiday season approaches, but the form of those initiatives has not firmed yet.

Our subscribership increased from 1012 to 1206. As could be expected, our FCF decreased to $1,026, after last quarter’s timing boosted $1,417. As to the excess cash we had on the balance sheet at quarter end, because of some accounting fraud issues we are finding that the best use of the cash on the balance sheet will almost certainly be on acquiring an appropriately prestigious corporate pen. We are still exploring what corporate pen is most consistent with producing the levels of prestige commeasurate with what Long or Short Capital subscriberholders would expect. Additionally, we expect the accounting fraud issue to have an impact of well under one million [inaudible] and as such, we do [inaudible] to get into it further.

Returning to the metaphor I used on the last call, we were that 7 coming out of college, and we spent Q3 and Q4 exercising, investing in our wardrobe, blonding our hair and not-eating three healthy meals a day. Now we are a 9 and everyone wants us. The question is, what do we do now that we have successfully transitioned? The answer? We embark on a career as a CNBC or Fox Business News reporter or anchor. With our ten cent head and our million dollar body, this is our clear next step and Long or Short is pursuing this to its fullest. We will update you on our efforts in this vein on our next call. Thanks and let me say on behalf of management that we will continue to make ‘Long or Short Equity Ownership Experience. ™’ as amazing for you as it is has been for our yacht collection.”

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Note that the financials below are unaudited and may contain non-GAAP measures. All numbers comply with Seldom Accepted Accounting Principles (SAAP).

Unaudited Financial Results for Q4’07
Income Statement

Contextual CPC Revenue $283
CPA Revenue $7
Static Ad Revenue $891
Other Revenue $28

Total Revenue $1209

Cost of Sales $19.55
SAAP Income $1190

Balance Sheet

Cash $2914
Accounts Receivable $463
Inventory $0.00
Prepaid Marketing/Hosting/Reg $142
Accounts Payable $0

Cash Flow Statement

Operating Cash Flow $1032
Capex $0.00
Dividends $X.00

Performance Metrics

Visits 77,671
Pageviews 157,529
Clicks on ads 491
Subscribers by Email 195
Subscribers by XML 1021
Technorati Rank 36,949
Inbound Links per Google ~403 sites
Google PageRank 5

Past Results (due to our reliance on SAAP, previous unaudited financial results are not reliable)
Long or Short Capital Q1’06 Results
Long or Short Capital Q2’06 Results
Long or Short Capital Q3’06 Results
Long or Short Capital Q4’06 Results
Long or Short Capital Q1’07 Results
Long or Short Capital Q2’07 Results
Long or Short Capital Q3’07 Results

Also here is a look at our Google Spreadsheet Financials spread out quarterly. As you can see, we strictly adhere to SAAP.

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