Stock Alert for FriendFinder Networks Inc. (FFN)
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    Stock Report for FriendFinder Networks Inc. (FFN)

    FriendFinder Networks Inc. (FFN) is an Internet-based social networking and technology company operating several of the most heavily visited Web sites in the world, including,,,,, and, and social commerce company operating JigoCity Web sites in more than five countries, providing members high quality, daily deals that are relevant to their individual lifestyles. In addtion, FFN produces and distributes original pictorial and video content and engages in brand licensing.

    Share Statistics (21-Feb-12)   FY












    Symbol FFN Revenue, $Mn 327.69 346.00 5.6% 86.66 82.74 -4.5%
    Current price $2.35 Gross marg. 72.0% 68.1% -5.4% 68.9% 66.3% -3.8%
    52wk Range: $ Oper. margin 18.6% 17.8%
    Avg Vol (3m):   Net margin -12.6% -12.5% -0.8% -5.8% -6.5% 12.1%
    Market Cap.                
    Shares Outstanding   EPS, $ -1.27 -1.32 3.9% -0.46 -0.17 -63.0%

    Source:, SEC Filings.

    Investment Highlights

    FriendFinder Networks Inc. (FFN) on Tuesday inched up 0.86 % to close the session at $2.35, stretching gains into a fourth day.  Over 1.62 million shares traded hands during the session, versus the 10-day average volume of over 1.65 million.  FFN is currently above its 50-day moving average of $1.23 and above its 200-day moving average of $1.81.

    Shares of the Boca Raton, Fla.-based Internet and technology company have risen 15.2% in the last five days and 190.1% in the last month; though the stock dropped 17.5% in the last six months to date.

    FFN shares gained on Tuesday as investors welcomed a research study that affirms the rapid growth of the online dating industry and forecasts the market to surpass $2.5 billion by 2015.

    According to the research, which was conducted by Florida-based market researcher Marketdata Enterprises, dating Web site growth is expected to be 7.2% annually with key drivers that include geographic and mobile application expansion. Marketdata Enterprise has tracked the dating service market since 1998.

    Marc Bell, president and CEO of FFN, commented in the release: “The Marketdata study confirms what we have known for some time – online dating presents a tremendous opportunity for FriendFinder Networks.  Already considered one of the most significant participants in online dating, with properties that include,,,,, and, FriendFinder Networks operates more than 40,000 sites, catering to over 528 million registrants.  This robust platform provides us with tremendous coverage and exposure to a strong and growing market.”

    Bell added that while all of FFN’s sites benefit from a shared technological and operational platform, the Company’s focused approach on multiple demographics provides users with an intimate experience focused on the interests, beliefs, and values that are most important to them.  This individualistic approach has allowed the Company to continue to penetrate different areas of the market and establish ourselves as the leader in social networking and dating Web sites.

    Also, the explosion of smartphone technology has made mobile applications a key component of online dating, said the Company.  The All FriendFinder App, available on iPhone, Android and other smartphones offers users of any of FFN’s sites a way to keep in touch on the go and manage their dating life from the palm of their hand.

    FFN is confident it is well positioned to address specific areas driving growth.


    Financial Summary

    FFN’s revenue for the third quarter of 2011 came in at $82.7 million. The Company said the result was impacted by a decrease in traffic and a decline in new subscribers and renewal orders primarily in European markets. Social networking revenue was offset by an increase in live interactive video.

    FFN realized income from operations of $14.7 million for the quarter, impacted by a lower gross margin and an increase in product development, selling and marketing, and general and administrative spending. The increase in these expenses was primarily due to an increase in headcount across the Company as it develops its business units and general and administrative expenses related to stock compensation expense.

    FFN posted a net loss of $5.4 million, or $0.18 per share, for the quarter.  Adjusted EBITDA came in at $20.3 million.

    As of September 30, 2011, the Company had cash and cash equivalents of $28.2 million, compared to $42.0 million at December 31, 2010. As of November 14, 2011, the Company had outstanding principal debt of $491.8 million. On November 4, 2011, the Company paid down $7.3 million of New First Lien Notes and Cash Pay Second Lien Notes. Free Cash Flow per Share was $0.36 and $1.99 for the three and nine months ended September 30, 2011, respectively.


    Financial Strength (21-Feb-12)




    S&P 500

    Quick Ratio (MRQ) 0.38 0.58 1.04 0.58
    Current Ratio (MRQ) 0.39 2.91 2.70 0.93
    LT Debt to Equity (MRQ) 10.45 12.87 170.90
    Total Debt to Equity (MRQ) 18.17 23.36 228.35
    Interest Coverage (TTM) 1.22 1.59 26.29

    Source:, SEC Filings.

    Technical Analysis



    Comparative Analysis

    Company Name Ticker Price per Mrkt. Cap. P/E P/S
    Feb21-2012 symbol Share, $ $ Mn 2011 2012 2011 2012
    Groupon Inc. GRPN 19.84 10.49B 68.41 23.90 4.44 3.50
    Quepasa Corp. QPSA 4.27 143.76M 71.17 13.00 2.99
    Linkedin Corp. LNKD 90.87 8.95B 146.56 83.37 10.28 6.99
    Renren Inc. RENN 5.36 2.10B n/a n/a 17.80 12.00
    Internet Software & Services Median       27.03 n/a 2.76 n/a
    FriendFinder Networks Inc. FFN 2.35 73.36M 1.33 1.28 0.22 0.22

    Source: Thomson Financial

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