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Well now the story is updated. Quoted below: UPDATE: Just got off the phone with Hamadeh, who is standing by his original report. He says O'Shaughnessy is misl

Well now the story is updated. Quoted below: UPDATE: Just got off the phone with Hamadeh, who is standing by his original report. He says O'Shaughnessy is misleading his own employees, and that classifying the round as "equity" is a technicality given all of the debt-like provisions PrivCo continues to believe were attached. He also says that PrivCo spoke with a LivingSocial spokesman prior to publishing, and sent him a draft of the report with a request for any needed corrections. When nothing came back four hours later, PrivCo published. As you might imagine, now I've got a new call into LivingSocial.

tptacek 14y ago
This is exactly what I would do if I was an evil publication: make a prediction as to the trendlines of a business, write up a report full of false evidence, send a draft to the target and then declare it was the target's responsibility, not mine, to ensure that my report was correct. What's different after this followup is that now CNN/Fortune is suspect too, because repeating this verbatim is unethical.
- milkshakes 14y ago
  > What's different after this followup is that now CNN/Fortune is suspect too, because repeating this verbatim is unethical. You trusted them before?
  - tptacek 14y ago
    More than I trust TechCrunch, less than I trust Reuters.
- dailyrorschach 14y ago
  I don't have a firm opinion on the matter yet. I was initially suspicious of the initial report as I had never heard of them (PrivCo). However, I do work in advertising/PR and if someone submitted a claim like this to a spokesperson within four hours, we would at least say there are considerable and factual errors with your report, etc. This of course may have happened. My interest in following this story is personal as I live in DC and have many friends still employed at the company. I'd disagree that CNN is being unethical here, their story/angle is about the process and getting to the bottom of the PrivCo report.
  - tptacek 14y ago
    FOUR HOURS. That's how much time they claim to have given LivingSocial before running the report. Horsewhip these clowns off the stage now. It's actually even worse if underlying trend they're "reporting" on is true, because they've poisoned the well.
    - dailyrorschach 14y ago
      PrivCo looks even worse now with this additional update to CNN's story: "I don't think the real story here is the details of the financing," Hamadeh [PrivCo CEO] said. "It's what's going to happen to the little guys, all of the merchants who are really the company's unsecured creditors, if LivingSocial goes bankrupt... You'll see that we were right in six or nine months."
      - FinTechCTO 14y ago
        Uh you don't think the most important story from public interest point is what it means for 1,000s of barely getting by local merchants that their place in line in a bankruptcy - which looks more and more likely - since LivingSocial per Fortune says was down to just $28 M before this emergency financing - so end of Feb had $28M + $110M new money so = $138M cash now (but still owed those 1,000s of local merchants within next 30-60 days over $350M) is not the most important part of what's going on at LivingSocial, and that privco was trying to sound the alarm to local merchants and employees that LS doesn't have the cash to pay them in full?? How will merchants survive? (If you've ever had a family member run a restaurant or hair salon, they barely survive week to week. They served the food, they did the haircuts. They're owed their money. They have a right to know whether the company that owes them the money has the money to actually pay them on time or at all, don't they? If not, shouldn't they refuse to honor any more LS vouchers and save themselves? To me who has several family members who are small local business people like this (and yes some have recently run LS deals, thinking that with $850M and amazon name they can count on it coming on time on the 15th or the 20th next month and are timing their paying their bills the moment they receive that LS check. You don't care about that? What exactly is important to you? Privco exposed the balance sheet on 12/31 in black and white...massive shortfall in money to pay those merchants, massive losses, even worse terms to get final lifeline. And it was all based on math that can't be denied, unless you are a troll for livingsocial PR or have your head up your ass.

tptacek 14y ago

This is exactly what I would do if I was an evil publication: make a prediction as to the trendlines of a business, write up a report full of false evidence, send a draft to the target and then declare it was the target's responsibility, not mine, to ensure that my report was correct. What's different after this followup is that now CNN/Fortune is suspect too, because repeating this verbatim is unethical.

milkshakes 14y ago
> What's different after this followup is that now CNN/Fortune is suspect too, because repeating this verbatim is unethical. You trusted them before?
- tptacek 14y ago
  More than I trust TechCrunch, less than I trust Reuters.
dailyrorschach 14y ago
I don't have a firm opinion on the matter yet. I was initially suspicious of the initial report as I had never heard of them (PrivCo). However, I do work in advertising/PR and if someone submitted a claim like this to a spokesperson within four hours, we would at least say there are considerable and factual errors with your report, etc. This of course may have happened. My interest in following this story is personal as I live in DC and have many friends still employed at the company. I'd disagree that CNN is being unethical here, their story/angle is about the process and getting to the bottom of the PrivCo report.
- tptacek 14y ago
  FOUR HOURS. That's how much time they claim to have given LivingSocial before running the report. Horsewhip these clowns off the stage now. It's actually even worse if underlying trend they're "reporting" on is true, because they've poisoned the well.
  - dailyrorschach 14y ago
    PrivCo looks even worse now with this additional update to CNN's story: "I don't think the real story here is the details of the financing," Hamadeh [PrivCo CEO] said. "It's what's going to happen to the little guys, all of the merchants who are really the company's unsecured creditors, if LivingSocial goes bankrupt... You'll see that we were right in six or nine months."
    - FinTechCTO 14y ago
      Uh you don't think the most important story from public interest point is what it means for 1,000s of barely getting by local merchants that their place in line in a bankruptcy - which looks more and more likely - since LivingSocial per Fortune says was down to just $28 M before this emergency financing - so end of Feb had $28M + $110M new money so = $138M cash now (but still owed those 1,000s of local merchants within next 30-60 days over $350M) is not the most important part of what's going on at LivingSocial, and that privco was trying to sound the alarm to local merchants and employees that LS doesn't have the cash to pay them in full?? How will merchants survive? (If you've ever had a family member run a restaurant or hair salon, they barely survive week to week. They served the food, they did the haircuts. They're owed their money. They have a right to know whether the company that owes them the money has the money to actually pay them on time or at all, don't they? If not, shouldn't they refuse to honor any more LS vouchers and save themselves? To me who has several family members who are small local business people like this (and yes some have recently run LS deals, thinking that with $850M and amazon name they can count on it coming on time on the 15th or the 20th next month and are timing their paying their bills the moment they receive that LS check. You don't care about that? What exactly is important to you? Privco exposed the balance sheet on 12/31 in black and white...massive shortfall in money to pay those merchants, massive losses, even worse terms to get final lifeline. And it was all based on math that can't be denied, unless you are a troll for livingsocial PR or have your head up your ass.