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How do you lose money as essentially running a classified ad site?
by daft_pink 1y ago
How do you lose money as essentially running a classified ad site?
- motohagiography 1y agoit's a bankruptcy so I would estimate revenues were insufficient to service both debt and operating expenses. ideally they have assets like real estate or something of value to liquidate, but regardless, it's likely that everyone except employees will have been paid. imo there are three phases of a company: build, manage, liquidate. essentially seed/A-B, C-N rounds, PE debt rounds & asset stripping.
- daft_pink 1y agoI guess I don't understand how they could have substantial expenses for something that essentially is a fancy forum based website, where companies pay to post. I would expect that revenues could go down, but their gross margin should be so large that it would reduce profit and losing money should be impossible let along bankruptcy.
- motohagiography 1y agoif they were levered enough and the interest rate changed vs. their revenue, it was probably inevitable. slowly, and then all at once as they say.