Go Daddy's yanked IPO doesn't register
Why did domain-name registrar Go Daddy Group pull its $200 million IPO? Most media outlets parroted the company line that "market conditions" were unfavorable. The New York Post got a little closer, saying it's because CEO Bob Parsons is a relentless publicity hound who missed doing his weekly Internet radio show and blogging about the company's finances -- activities he had to give up during the SEC-mandated IPO quiet period.
But we've got another theory: Parsons doesn't have much appetite for the niceties of GAAP accounting. In a blog post about the pulled IPO, Parsons complains about SEC accounting rules that force Go Daddy to count domain-name revenues over the length of the registration, rather than upfront. That adds up to a pretty big difference in the numbers Parsons used to throw around and the ones his lawyers filed with the SEC. Last year, for example, Parsons told Business 2.0 that the company made $24 million on $102 millon in sales back in 2004. The actual figures? A $3.7 million net loss on $73 million in revenues. (A Go Daddy spokesman pointed The Browser back to Parsons's blog post when we asked for a clarification of the discrepancy and said the company wouldn't comment on past financial figures.)
Following strict accounting also dented Parsons's optimistic forecasts: 2005 revenues hit $139 million, about 30 percent short of the $200 million projection he shared in the same 2005 Business 2.0 interview. Even in his most recent blog post, Parsons still highlights -- in bold, no less -- the company's positive operating cash flow rather than its net loss.
No doubt some other companies wish they could just pick the accounting rules that make them look the best, bold the numbers they want people to pay attention to, and hope investors will ignore the fine print, but that's not how Wall Street (usually) works. Some people just aren't ready to run a public company -- and it looks like Parsons is one of them.
Posted by Owen Thomas 10:33 AM 0 Comments | Add a Comment
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