Category: News

Will Yelp Give Goldman Sachs and Citigroup 5 Stars For Its IPO?

Fun fact: yours truly used to be a hardcore Yelper, ranked San Francisco’s funniest Yelper for a good year and a half before I gave up and quit the site. God that makes me feel like a loser. As it should.

Anyway, here’s my issue with a Yelp IPO… Yelp should have quit way back when I did. The window of opportunity, in my mind, has long passed. Maybe in 2007 Yelp had a chance to blow it up but how are they even relevant anymore? Beyond the rabid fan base and drive-by Googlers, I’d say no. They blew a Google deal. They totally bit off the foursquare formula when they should have come up with it first. They still don’t have a money-making plan, as far as we can tell.

So here’s the really crazy part: according to DealBook, Yelp has brought on Goldman Sachs and Citigroup to help with its IPO. Did Jeremy S. suffer from brain-eating food poisoning?!

The offering, which is expected to value the company at $1.5 billion to $2 billion, will probably come to market in the first quarter of next year, a person close to the company said. Yelp is expected to file its prospectus by the end of this year.

In recent months, Yelp has openly telegraphed its intention to go public. At a technology conference during the summer, Yelp’s chief executive, Jeremy Stoppelman, said the company was still pursuing an I.P.O. but did not have a set time line. In late July, in a move that many interpreted as another step toward the public markets, the company hired a chief financial officer, Rob Krolik, who helped Shopping.com go public in 2004.

Just last year, Stoppelman said Yelp likely wouldn’t go public for years, while it took $25 million in funding from Bono’s Elevation Partners. Remember, Elevation Partners also bought a 25% stake in Palm – anyone remember them? Anyway, earlier this year, Stoppleman proudly declined additional financing and announced that “an IPO is back on the table” for Yelp.

Fun fact: GS and Citi also worked on Groupon’s IPO, with Goldman serving as one of the lead underwriters.

But Yelp is no Groupon (that might be a good thing). The seven-year-old start-up has yet to prove how it can make money, outside of shaking down companies and forcing them into sponsorships. Oops, did I say that out loud? I meant through “advertising” revenue from sponsoring companies interesting in “creatively shuffling” their negative reviews.

The sad part is Yelp has an extensive team of writers in its users, and they are constantly creating free content (some of them are not too shabby, either) yet it still cannot figure out how to make money off that. What on Earth is an IPO going to change about that?

How One Emotionless CPA Completely Dominated The Penn State Press Conference

U.S. Steel CEO and vice chairman of the Penn State Board of Trustees John Surma spent last night in the hot seat, fielding angry questions from bitter Penn State fans-cum-journalists (read: second year J-schoolers) distraught by this whole scandal nonsense. You see, it fell on his shoulders to announce to the world that the trustees canned head coach Joe Paterno and university president Graham Spanier.

Why do we care? Surma got his BS in accounting from Penn State University in 1976 and started off his career at then Price Waterhouse. He is a member of the AICPA and sits on the Bank of New York Mellon’s board. Therefore, he’s a member of the club.

And he handled last night’s Penn State press conference like a gangster. Even when angry “journalists” attacked.

See? This is why you send a CPA into the lion’s den. An architect would have crumbled. An engineer may have cried. A doctor would have cowered in fear. But a CPA? Stone-faced and calm with zero emotion, just how a Board of Trustees vice chairman should be when announcing a beloved coach has been canned due to, er, questionable discretion. And of course, because CPAs aren’t real big on that whole interaction thing, they called Paterno on the phone to tell him the news. Not a sit down or even coffee, but a phone call.

Told you he was gangsta.

Here’s the video:

Memo to CPAs: Those Needy Clients Are Sick of You Not Giving Them Enough Attention

Do you have needy clients? You know the type – they want to talk to you when every little thing goes wrong. They call to chit-chat for no reason in particular. They need your opinion on EV-ER-Y-THING. How are you responding to these people? Are you not returning their calls? Are you showing up late to your meetings with them? Do you just listen passively on the phone while repeating, “Uh, huh. Yes. I understand,” as you struggle with level 6-13 on Angry Birds? THOUGHT SO.

Well, they’re on to you. They sense your lack of interest. Your lack of giving a rat’s ass. And you know what? They are FED UP. There are plenty of CPAs out there that would love a client like them and MAYBE they’ll just go out and find one:

“Business is out there, but you have to market yourself differently,” [Allan Koltin, chief executive of Koltin Consulting Group] said, noting that one out of seven accounting firm clients are not happy with their accounting firm and are open to switching firms.

He urged attendees to spend time learning the personal goals of their clients. Among the factors affecting a client’s decision to leave an accounting firm, fees were ninth on the list, he indicated. “The number one factor was that the firm didn’t spend enough time with the client.”

“They don’t care how much you know until they know how much you care,” he said.

Got the message? They aren’t going to put up with your shit forever.

Business Resurging for Accounting Firms [AT]

Speaker of the House John Boehner Isn’t Sure Why You Would Bring Up ‘Random Person’ Grover Norquist

And this after GGN said such nice things about the Speaker.

Thursday, when NBC News’ Luke Russert asked Boehner if Norquist makes a positive impact on the party, Boehner thought it over for five seconds, The Washington Post’s Felicia Sonmez reports, before responding, “Our focus here is on jobs. We’re doing everything I can to get our economy going, to get people back to work. It’s not often I’m asked about some random person.”

I’m not sure how a person could bounce back from such an outright snub but it appears the Godfather of Tax Policy is taking it in stride and standing by his man.

[via AtlanticWire]

BREAKING: Stress Affects Accountants’ Mental Health

Yep! And apparently there’s new evidence “suggesting” as much:

The Chartered Accountants’ Benevolent Association is logging rising numbers of calls from professionals who appear to be developing mental health issues, or believe they are at risk of doing so. Interim operations team manager Helena Coxshall said the evidence is not conclusive as the helpline does not offer medical diagnosis, but highlighted rising numbers of calls in the second half of 2011. “These are coming from people who feel that they are heading towards a potential breakdown and we also see it from people who call us regarding other issues, but appear to be showing symptoms of mental illness of which they may be unaware,” she continued.

So take care out there, masters of the double-entry system. The last thing we want to see is any of you cracking up.

Accountants’ mental health ‘hit by stress’ [Accountancy Age]

German Finance Minister Says No One Needs to Be Thrown Under the Bus for ‘Annoying’ 55 Billion Euro Glitch

Yesterday we learned that officials in the German government were a little surprised that a 55 billion euro accounting error wasn’t discovered by a “certified audit.” They’ve been quite the laughingstock in the German press, so they done their damnedest to find someone to throw under der bus. Well, today German finance minister Wolfgang Schaeuble basically put everyone at ease – there’s no one to blame!

The Finance Ministry knew “with certainty” on Oct. 13 that an accounting error had occurred after receiving notifications on Oct. 4, Schaeuble said at a press conference in Berlin today, adding the error is “annoying” because its magnitude can unsettle the public. “Here raves the lake and wants to have its victim,” Schaeuble said, citing from Friedrich Schiller’s drama William Tell. “That’s not my understanding” of how the biggest accounting error in Germany’s post-World War II history should be sanctioned, he said.

So rest easy, PwC. You’re off the hook for this one.

Schaeuble Says 55.5 Billion Euro Accounting Error Was a Glitch [Bloomberg]

It Appears That Non-Story of LarsonAllen and Clifton Gunderson Merging Is a Real Story Now

Last month we broke the news of LarsonAllen and Clifton Gunderson feeling each other out about a possible merger. At the time, Clifton Gunderson CEO Krista McMasters told Going Concern that the two firms were simply in “exploratory discussions” and it wasn’t a story. Sorta like when two celebrities are seen vacationing on a yacht together. Everyone just assumes they’re banging, will eventually be a couple and the new celeb couple name game begins instantly. However, it turns out that they are “just friends” who are “enjoying time together.” For this particular round, our sources told us that LA and CG were “50/50,” that LarsonAllen had approved the merger and that the new merged firm would be known as CliftonLarsonAllen. Again, at the time of our discussion, Ms. McMasters denied that anything had been decided.

Well, today, it appears that the “exploring” went pretty well and the name game was right on the money:

Clifton Gunderson and LarsonAllen have confirmed they plan to merge in the New Year into a combined firm known as CliftonLarsonAllen. The two firms said Tuesday they would combine, effective January 2, to create one of the top 10 accounting firms in the U.S., with combined revenues of between $550 million and $560 million.

Not to nitpick but by Accounting Today’s count, the combined revenues would be closer to $470 million. I haven’t punched a 10-key in a number of years but that’s the number I got. I guess sometimes you just gotta take their word, amiright? ANYWAY, since these two firms were simply in “exploratory discussions” it’s pretty impressive that they were able to slap this deal together so quickly isn’t it?

The two firms began discussions in the spring and made rapid progress. “As often happens in our profession, firms get together to talk about what it might look like if they ever were to come together and how they might help each other,” said LarsonAllen CEO Gordy Viere.

Gosh, I must have a warped idea of what “exploratory” means. And by “spring” I assume that’s the period between late March and late June? And by rapid progress, does that mean, in three months they were still in “exploratory discussions” and nowhere near a deal, only to fall into each other’s arms less than a month later? I need help with this.

Clifton Gunderson and LarsonAllen to Merge [AT]

German Government Was Under the Impression That a ‘Certified Audit’ Would Find a 55 Billion Euro Accounting Error

Most people are of the opinion that government can’t do anything right. Education? Bah. Economies? Duh. Wars? YEESH. Oddly, politicians are quite fond of mocking the inefficiencies and mistakes of government to better relate to the common folk who don’t put much stock in the government’s operations. This means that politicians must find other people to hold responsible for the mistakes that are happening all around them. This also means that the art of blamestorming is the most coveted skill in all of politics (well, maybe after being able to lie through your teeth). Do things right and you live to fight another day. Do things wrong and you just look like an ass and then have to weather repeated calls for your resignation.

The German government is taking a fair amount of shit for missing a 55 billion euro accounting mistake. This size of a boo-boo can’t really be swept under the rug so, right on cue, the finance minister has turned on the blamethrower full blast:

Finance Minister Wolfgang Schaeuble has summoned executives from the nationalized mortgage bank Hypo Real Estate (HRE) to explain how they made a simple accounting error that ended up raising Germany’s total debt load by 55 billion euros.Schaeuble, in the awkward situation of being humiliated by the windfall that will cut Germany’s debt levels, will also demand answers at a Wednesday meeting from the PwC accountancy firm that signed off on the report.

Schaeuble’s spokesman Martin Kotthaus tried to deflect any blame, saying the ministry received a certified statement from auditors that the balance sheets had been checked and approved. He said it was too early to tell exactly who messed up.

“It’s annoying, to put it diplomatically, when corrections of this dimension are necessary,” said Kotthaus, who was grilled at a news conference. “We had a certified audit of the annual accounts for 2010 and it said everything was in order.”

Right! A certified audit! If there’s anything we’ve all learned, it’s that audits are the one infallible stamp of approval that we can always turn to for confidence. Just ask Lehman Brothers. Or Satyam. Or Li & Fung. Or MF Global. Or Taylor, Bean & Whitaker. Or Koss. Or Countrywide. [breathe, breathe] Or World Capital Group. Or Sino-Forest. Or Colonial Bank. But aside from those, yeah, audits. Those things are solid.

Germany mocked for 55-billion euro bank accounts error [Reuters]

President’s Council on Jobs Report Suggests We Should Try Sarbanes-Oxley Light for IPOs

Barbara Roper wrote a commentary piece in WaPo Capital Business over the weekend that suggests the unthinkable: softening hard ass SOX rules for IPOs could actually kill jobs. How is that possible? Aren’t IPOs great for the economy?

Well, not always. Case in point: Groupon. Healthy, financially strong businesses are good for the economy. Scams, frauds or even overambitious accounting tricks might temporarily get the economy’s spirits up like a few rails of coke but eventually reality sets in and the economy is left broken and penniless in the alley looking for its next hit.


The report is an effort on the part of the Obama crew, who surveyed 27 business executives (including AOL’s Steve Case… and we know how his business turned out) for ideas on how to get the economy moving again. Among the suggestions, the report recommends Congress make compliance with all or part of Sarbanes-Oxley voluntary for public companies with market valuations up to $1 billion or, alternatively, exempt all companies from SOX compliance for five years after they go public.

The report blames burdensome SOX rules for the sharp drop in small IPOs in recent years, writing:

In the aftermath of the dot-com bubble and unintended consequences stemming from the Spitzer Decree and Sarbanes-Oxley regulations, the number of IPOs in the United States has fallen significantly. This is especially true for smaller companies aspiring to go public. As noted earlier, the share of IPOs that were smaller than $50 million fell from 80% in the 1990s to 20% in the 2000s. Well-intentioned regulations aimed at protecting the public from the misrepresentations of a small number of large companies have unintentionally placed significant burdens on the large number of smaller companies.

That would totally work as a justification except the SEC already debunked this silly idea. In a report earlier this year recommending no new 404(b) exemptions, SEC analysis showed that the United States has not lost U.S.-based companies filing IPOs to foreign markets for the range of issuers that would likely be in the $75-$250 million public float range after the IPO. “While U.S. markets’ share of world-wide IPOs raising $75-$250 million has declined over the past five years, there is no conclusive evidence from the study linking the requirements of Section 404(b) to IPO activity,” the report stated.

And as we all know, companies under $75 million haven’t had to worry about the SOX burden at all thanks to Congressional intervention. So how could it be that the burden they haven’t had has somehow prevented them from going public?

New boogeyman, please. I’m no huge fan of SOX but you’re going to have to come up with something better than this to convince me it’s a good idea to can it.

Another Hedge Fund Manager Doesn’t Like the Smell of Green Mountain’s Accounting

Green Mountain Coffee Roasters Inc. […], maker of the single-serve Keurig brewing machine, fell to the lowest in seven months after hedge fund managing director Whitney Tilson said there may be potential for accounting fraud at the company. Green Mountain fell 10 percent to $58.19 at 1:07 p.m. in New York, after dropping to $56.19, the lowest intraday price since March 10. The shares lost 22 percent in the week before today after David Einhorn, the president of Greenlight Capital Inc., said the company has a “litany of accounting questions” and needs to improve its transparency. [Bloomberg, Earlier]

Romney Trumps Obama in Accounting Firm Donations to Presidential Candidates

You may have heard that there’s a bit of a campaign going on for the world’s worst job. For whatever reason, the process of electing the leader of our country’s government drags on like Titantic. Right around, erm, now you’re probably ready to gouge your eyes out with a rusty spoon every time you see an ad for a candidate or debate. Unfortunately we’re powerless to stop it, thanks tycle.

ANYWAY, one of the more useful things we learn during this process is where the money comes from and who it goes to. Now, you may be screaming, “Koch Brothers!” or “George Soros!” and while they can afford to throw around some cash, these stories are old hat and are best left to political bomb throwers with jostling jowls.

For our purposes of informing you, dear GC readers, we’ll give you the lowdown on what kind of cash people from the largest accounting firms are throwing around and who they’re throwing it to. Accounting Today has a full report out today based on data available from the Federal Election Commission and here are the highlights:


• Ernst & Young – E&Y donated the most cash, with personnel contributing more than $89,000. 18% went to President Obama, Mitt Romney received 39% and Rick Perry 37%. Personally, I feel like this money would be better spent throwing it at people in Albany.

• Deloitte – Total of $57,490 in donations. Mittens received 41%; Obama 37%.

• PwC – $36,520 total donations. Romney received 51%; Obama 48%.

• KPMG – The one Obama stronghold. The President received 47% of the total $15,000 in donations. Romney received 32%; Perry 17%.

• Grant Thornton – Obama doesn’t win. GT peeps gave $23,050 and 97% went to Mitt Romney.

What about the other candidates? Well, Newt Gingrich received a grand total of zero dollars from anyone at these accounting firms. Ron Paul received less money than Jon Huntsman. Yes, I know you’ve never heard of him. It’s this guy. Google Rick Santorum just for fun. And check out Michelle Bachmann’s manicures. That’s about all you need to know.

So who gets your imaginary contributions? I imagine most of you out there in Internetland have no plans to fork over any of your meager bonuses to a Presidential candidate but IF YOU DID, who would it be? And feel free to discuss your firm’s generosity or political leanings as you see fit.

Accountants and Firms Fund Presidential Candidates [AT]